In Britain there is no longer statutory support for the closed shop, a
nd in the USA many states have 'right-to-work' laws. Wages and members
hip determination are examined in this setting. The main findings are:
(i) already established unions will not necessarily wither away with
the mere passage of right-to-work laws; (ii) however, they may disinte
grate when faced with substantial negative demand shocks; (iii) new un
ions will find it harder to become established; (iv) greater dispersio
n in worker attitudes to joining unions will lower membership but not
necessarily wages-which is broadly consistent with some empirical stud
ies.