Economic Growth and Right-to-Work Laws

Source: Michael J. Hicks and Michael D. LaFaive, Mackinac Center for Public Policy, 2013

From the summary:
This study aims to measure the impact of right-to-work laws on states’ economic performance. It uses average annual growth rates in employment, real (inflation-adjusted) personal income and population to measure the economic well-being of right-to-work states. On the whole, the results of this analysis show that right-to-work laws have a statistically significant and economically meaningful positive impact, although the results vary.

There are research challenges to studying the impact of right-to-work laws. One such problem is timing. For instance, it may take a significant period of time, perhaps more than a decade, for the impact of certain policies like right-to-work laws to generate any demonstrable impact on a complex state economy. For these reasons, this study analyzes data from a 64-year period — from 1947, when federal law changed to allow for right-to-work laws, through 2011, the most recent year for which data are available.

Another challenge related to timing is that the effect of right-to-work laws may change as economies and government policies evolve over time. For instance, most would agree that the economy of the 1991-2011 era is different in many ways than that of the 1971-1990 era. For this reason, this study analyzes the effect of right-to-work laws over the entire aforementioned 64-year period, but also in three distinct periods: 1947-1970, 1971-1990 and 1991-2011….