The Walker Effect: Evaluating the Economic Impact of Right-to-Work Laws in Wisconsin

Abstract

It is widely believed that right-to-work laws produce adverse outcomes for workers. For instance, it is well documented that these type of policy interventions weaken labor unions by limiting their funding sources to workers who proactively elect to pay union dues. In this paper, I examine the change in selected economic outcomes in Wisconsin following the passage of right-to-work laws in 2011 for the public sector and 2015 for the private sector. Relying on data from the Census Bureau and using a difference-in-differences design to identify the effect of this policy intervention, I compare county-level wage, income and unemployment data in Wisconsin and Minnesota, a demographically, historically and economically similar neighboring state in which no right-to-work law was passed. I find small but statistically significant declines in wages and income and a positive effect on employment in Wisconsin after the passage of the laws. Due to the fact that these results are sensitive to variations in the selection of counties and inclusion of certain control variables, meaning further research is warranted.