The ways collective bargaining affects the operation of public schools are identified. Teachers covered by bargaining agreements, compared with teachers not covered, receive higher salaries and teach smaller classes. They also spend slightly less time instructing students but more time preparing for classes. The major difference detected in the study is that educational cost per pupil is 15 percent higher for union than for nonunion districts, while the average student in union districts scores 5 percent higher than students in nonunion districts. Union and nonunion districts also differ significantly in the way students are taught. Union districts make greater use of traditional classroom instruction and less use of specialists, aides, tutors, and independent programmed study. These differences may account for the fact that union districts appear to work best for average students but less well for students well above and well below average. (Author/GJ)