I have a new working paper with Justin Callais, Alicia Plemmons and Gary Wagner on the first wave of right to work laws in America (1944 to 1963) which banned closed shop union agreements. We find, unlike other works that deal with later adopters (post-1963), that right to work increased within-state inequality but also increased income per worker by between 4% and 7%. Since the states that adopted right to work laws were also poorer states that converged faster because of the laws, this probably mitigated (but not fully) the within-state increase in inequality (i.e., reduced cross-state inequality compensates for increased within-state inequality). The paper is here on SSRN and the abstract is below:
Since the 1940s, right-to-work (RTW) laws’ impact on income distribution has been debated, particularly due to the understudied early adopters from 1944 to 1963. Earlier studies overlooked these initial impacts, starting analysis with Louisiana in 1976. Our research employs a two-stage difference-indifferences approach, revealing that RTW laws increased the income share of the top 1%, raised average income per worker with no effects on other variables (labor force participation, labor share of income). These laws contributed to rising inequality within states, countering the trend towards income equality from the 1940s to the 1960s.
Vincent Geloso 