Contrary to many past studies on teachers' unions ... I find unions have no effect on teacher pay. I also present evidence teacher unionization causes an increase in full-time teacher employment of about 5 percent, a negligible decrease in student-teacher ratios, and only has a short-run positive effect on current operating expenditures per student.
I estimate the impact of unions on high school dropout rates using 1970-1990 U.S. Census school district summary data and find little evidence that unions affect this outcome measure. However, I am unable to determine with my data whether similar results would be found for other achievement measures that include more students from higher portions of the ability distribution.
The results and conclusions of this analysis raise a puzzle: why do teachers bother to organize, especially at the high rates observed in the data, given the lack of wage and class size effects? One possible answer to this puzzle is teachers perceive organization increases their pay. Indeed, when talking to union members during this study, wage increases were the most commonly mentioned benefit of unionization, in contrast to what this analysis shows. Another important reason for unionizing is to give teachers a voice with which to improve their working conditions as well as to establish well-defined rules governing hiring and firing, pay structure and promotion. There is anecdotal evidence teachers' unions provide these benefits ..., although I lack the data to test for such effects. Finally, unionization may increase non-wage benefits such as pensions or health care that are valued by teachers. Unionization thus can infuence how satisfied teachers are with their job, and consequently, may affect parent and student satisfaction with their school district.