Right-to-Work Laws and Local Economic Growth: Recent Evidence from Appalachia

Right-to-work legislation continues to be debated at both the national and state levels. This paper seeks to inform the debate on the effectiveness of RTW laws as an economic development strategy. Using the 399 counties of Appalachia as a case study, and a model informed by the human ecology and the new urban sociology, this paper compares recent earnings change during the last three business cycles in counties from right-to-work and non right-to-work states in the region. The analysis combines shift-share analysis and spatial lag regression analysis and estimates the relative effects of a variety of measures on county earnings change. The analysis fails to detect any overall advantage in earnings growth from nationally expanding industries for counties in RTW states since 1980. Moreover, the analysis indicates that other factors are more important in stimulating earnings growth from nationally expanding industries, particularly education. Implications for policy and legislative action are discussed.