Abstract
Balancing theoretical considerations against empirical findings from an extensive literature survey, the authors investigate the effects of unionization on key determinants of corporate performance, including productivity, technological innovation, investment, human capital formation, and profitability. This overview of microeconomic effects is followed by a discussion of economy-wide effects which highlights the importance of the policy environment in determining the propensity of trade unions to mediate particular economic outcomes. While workers need representation, the authors conclude, trade unions are most effective at improving conditions for workers without efficiency costs when product markets are competitive and unions need to care about rent creation.