To assess the effect of state right-to-work laws (which do not require membership in the union as

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To assess the effect of state right-to-work laws (which do not require membership in the union as a precondition of employment) on union membership, the following regression results were obtained, from the data for 50 states in the United States for 1982:

PVT; t = (17.0352) (-5.1086) 9.3917 RTW, 19.8066 = 2 = 0.3522


where PVT = percentage of private sector employees in unions, 1982, and RTW = 1 if right-to-work law exists, 0 otherwise. Note: In 1982, twenty states had right-towork laws.
a. A priori, what is the expected relationship between PVT and RTW?
b. Do the regression results support the prior expectations?
c. Interpret the regression results.
d. What was the average percent of private sector employees in unions in the states that did not have the right-to-work laws?

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Basic Econometrics

ISBN: 978-0073375779

5th edition

Authors: Damodar N. Gujrati, Dawn C. Porter

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