Cleaning your hands
The UK NHS has a write up of a 2012 review of the evidence in Mayo Clinic Proceedings. They note that the papers reviewed reported different results, probably due to factors such as the type of hand drier and washing and drying techniques. The review concludes:
Most studies have found that paper towels can dry hands efficiently,
remove bacteria effectively, and cause less contamination of the
washroom environment. From a hygiene standpoint, paper towels are
superior to air dryers; therefore, paper towels should be recommended
for use in locations in which hygiene is paramount, such as hospitals
and clinics.
But the NHS notes that:
However, if you have no choice – as is the case in most public toilets
and workplace washrooms – and only hot air dryers are provided, take
extra time to dry your hands thoroughly. There is little evidence that
they are any worse than hand towels, other than the extra time spent
drying your hands.
(The NHS's advisory body NICE has extensive guidelines on hand-washing and recommends the use of paper towels.)
Contamination
The NHS also has a write up of a 2014 paper in The Journal of Hospital Infection comparing the contamination from paper towels, warm air dryers (as represented by a Pro-Elec GSQ250B) and jet air dryers (as represented by a Dyson Airblade). It found that "Jet air and warm air dryers result in increased bacterial aerosolization when drying hands", with the jet air dryers being worst and paper towels the best. A 2015 paper in the same journal, 2016 paper in The Journal of Applied Microbiology and a 2018 paper in Applied and Environmental Microbiology (see story in Ars Technica) obtained similar results.
The Guardian has an industry perspective of the modern hand dryer design.