This study examines shareholder risk and rates of return in union and nonunion companies in 1973-87.Shareholder risk declined with the extent of union coverage in the 1970s, and returns were lower among highly unionized companies than among other companies during the late 1970s and early 1980s. Unionnonunion differences in risk were small and insignificant by the mid-1980s, however, and there was no systematic relationship between union coverage and shareholder returns in the mid-1970s or mid-1980s. Recent research has focused considerable attention on union-nonunion differences in profitability, market value, and other dimensions of firm performance or behavior. Becker and Olson (1989) provided a unique analysis of differences in shareholder risk and returns in union and nonunion companies. They found that during most of the 1970s, shareholder risk was systematically lower in union than in nonunion companies, and shareholders in more highly unionized companies realized lower rates of return than did owners of nonunion companies. Becker and Olson argued that lower shareholder risk in highly unionized companies is the result of risk shifting from owners to labor, and they suggested that lower investor returns during the 1970s led to increased pressure on management to limit the extent of union representation in the 1980s.This paper provides new evidence on union-nonunion differences in shareholder risk and returns using a sample of companies and a measure of firm unionization different from those used by Becker and Below, we briefly review the Becker and Olson study. We then present evidence on the relationship of firm union coverage with shareholder risk and rates of return for some 400 publicly traded manufacturing sector companies during the 1973-87 period.