Excludability and the Effects of Free Riders: Right-To-Work Laws and Local Public Sector Unionization

Benefits of collective bargaining in the local public sector are always nonrival for covered employees. In states with public sector right-to-work laws, they are also nonexcludable. Among 10,308 county and city departments that were nonunion in 1977, the probability of engaging in collective bargaining as of 1982 was signifi cantly and substantially lower in states with right-to-work laws. Furthermore, the larger the department the greater the reductton in the probability of forming a bargaining union. These results are the first nonexperimental evidence of the effects of free riders on the provision of a public good They support the hypothesis that, without excludability, free riders reduce the levels of public good provision.