There are a number of studies that compare the use of hand dryers vs paper towels and purport to show which is more sanitary / hygienic. Here, we will list a number of those studies. Where the studies were commissioned by an interested group, the results are not surprising and so we will try to show unbiased reports, and we will add to the list as new reports arise.
Hand Washing is Most Important
CDC recommendations are that hands are washed with soap and water and dried thoroughly with an “approved” drying method, which include paper towels or hand blowers. And all independent studies confirm that the most important thing is what your mother always told you: wash your hands with soap and water.
Myth Busters, for example, set out to tackle the myth that hand dryers spew bacteria over the bathroom. Interestingly, they never actually tested hand dryers but they did test hand washing. What they found was that if hands were washed with soap, there was no identifiable bacteria left on the hands. If they were washed without soap there was some bacteria, and if they were not washed at all there was a relatively large amount of bacteria. In a more scientific study in 2011, the Mayo clinic showed that there was no difference between paper towels and hand dryers in hygienic effectiveness. Also in 2011, the Mayo Clinic reviewed a number of other studies from the 1970s until that time. They found that some studies show that hand dryers are more hygienic and others show that paper towels are more hygienic. Based on their review, the Mayo Clinic gave the edge to paper towels. (However at least one of the studies was sponsored by the paper towel industry.)
On the other hand, a University of Laval study reported by the American Journal of Infection Control in 2012, showed that bacteria can be harbored in unused paper towels. They cited the paper towel manufacturing process one of the culprits. There could be others, like towels stored in damp conditions.
Paper towel vs hand dryer studies.
Dyson Airblade looks at the paper towel industry studies in a Youtube video. Shows why they believe the studies are biased and flawed. Dyson paper towel study video
Myth Busters show that washing hands with soap leaves virtually no bacteria. Myth Busters Hand Dryer Study
The US National Institute of Health conducted a study comparing paper towels to hand dryers. The study "revealed similar numbers of bacteria on the hands after drying by either method. Hot air hand driers appear safe from a bacteriological viewpoint." National Institute of Health paper towel vs hand dryer hygiene study.
Dr. William Schaffner, Vanderbilt University Medical Center on Newschannel 5 with a simple statement: “The important thing is to wash your hands thoroughly and then of course to dry them, whether it is with a towel or a hand dryer.” http://youtu.be/YvS72ljdPts
Mayo Clinic, 2011: In their study, the Mayo Clinic concludes that there is no measurable difference between paper towels and hand dryers: Mayo Clinic Hand Dryer vs Paper Towel Study
American Journal of Infection Control - University of Laval study shows that bacteria can be harbored in unused paper towels.
Studies sponsored by European Tissue Consortium:
2009: University of Westminster, London
2014: Hand dryers vs paper towels
Cleanlink cleaning industry articles
Note: These studies do not necessarily take into consideration the environmental impact of either method. There are other studies that cover that topic.