Chapter 22 Public sector labor markets This chapter discusses public sector labor markets. One unique aspect of public sector labor markets is that the laws governing impasse resolution vary across states. This provides an opportunity for researchers to estimate their effects on union nonunion wage differentials on wage levels on the demand for labor and on public private pay differentials. However other aspects of the legal environment that influence bargaining also differ across states; these include budget referenda requirements expenditure and or tax limitation legislation balanced budget requirements and agency shop provisions. Studies are required that consider all of these forces simultaneously and allow for the possibility that many of them are endogenously determined. A second unique aspect is that the unit of observation in public sector studies often tends to be a bargaining unit and the underlying union contracts in areas where bargaining takes place are typically available to researchers. Third in spite of the rapid growth of collective bargaining in the public sector and the variety of institutional arrangements for determining wages in the sector many studies of public sector labor markets make no mention of the role of unions and or the effects of the institutional arrangements.