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In this paper we seek to determine the impact of labor laws on the collective bargaining status, wages, and employment of local government workers in the United States. We use the new data on state public sector labor laws described in detail in appendix B in this volume and information from the Survey of Governments (SOG) and the Current Population Survey (CPS) to examine how differences and changes in public sector labor laws across states and among departments in cities affect collective bargaining, wages, and employment. The major finding is that state public sector laws are a prime determinant of the likelihood that municipal workers are covered by collective bargaining and have a moderate impact on the wages and employment of public sector workers. Comprehensive public sector labor laws raise the probability that workers are covered by collective bargaining contracts and, conditional on contracts, raise wages at the expense of employment. In addition, we find that employment and wages in otherwise identical departments are higher in those with collective bargaining contracts, supporting the notion that public sector unions raise demand for labor as well as increase wages along given demand curves (Zax 1985; Freeman 1986b).