(2025). Anti-Labor Environments and Employee Entrepreneurship: Evidence from Right-to-Work Laws Strategic Entrepreneurship Journal 2025, forthcoming.
We explore how changes in labor unions and related labor environments affect employees' likelihood of starting a new business. We suggest that the enactment of stringent anti-union laws reduces incentives for employees to stay with their respective workplaces and increases the attractiveness of becoming self-employed. Using the adoption of right-to-work (RTW) laws in Michigan and Indiana as a quasi-natural experiment, we find that the likelihood of employees becoming self-employed increased by 53% compared with that of states without RTW laws. Moreover, this tendency is more pronounced for blue-collar and low-wage workers who start unincorporated businesses. These findings offer novel insights on the relationship between anti-labor environments and necessity-driven entrepreneurship by focusing on individual-level incentives in non-knowledge-intensive sectors.
Also published in: Academy of Management Annual Meeting Proceedings Vol. 2023, No. 1
