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Prevailing Wage Laws and Construction Labor Markets

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  • Daniel P. Kessler
  • Lawrence Katz

Abstract

Prevailing wage laws, which require that construction workers employed by private contractors on public projects be paid at least the wages and benefits that are "prevailing" for similar work in or near the locality in which the project is located, have been the focus of an extensive policy debate. We find that the relative wages of construction workers decline slightly after the repeal of a state prevailing wage law. However, the small overall impact of law repeal masks substantial differences in outcomes for different groups of construction employees. Repeal is associated with a sizeable reduction in the union wage premium and a significant narrowing of the black/nonblack wage differential for construction workers.

Suggested Citation

  • Daniel P. Kessler & Lawrence Katz, 1999. "Prevailing Wage Laws and Construction Labor Markets," NBER Working Papers 7454, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:7454
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    References listed on IDEAS

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    Cited by:

    1. Jacobs, Ken & McBride, Justin & Smith, Rebecca, 2021. "State and Local Policies and Sectoral Labor Standards: From Individual Rights to Collective Power," Institute for Research on Labor and Employment, Working Paper Series qt9kt2b751, Institute of Industrial Relations, UC Berkeley.
    2. Blanchflower, David G. & Wainwright, Jon, 2005. "An Analysis of the Impact of Affirmative Action Programs on Self-Employment in the Construction Industry," IZA Discussion Papers 1856, Institute of Labor Economics (IZA).
    3. Blanchflower, David G., 2007. "Entrepreneurship in the United States," IZA Discussion Papers 3130, Institute of Labor Economics (IZA).
    4. David Neumark, 2004. "Living Wages: Protection for or Protection from Low-Wage Workers?," ILR Review, Cornell University, ILR School, vol. 58(1), pages 27-51, October.
    5. Ken Jacobs & Rebecca Smith & Justin McBride, 2021. "State and Local Policies and Sectoral Labor Standards: From Individual Rights to Collective Power," ILR Review, Cornell University, ILR School, vol. 74(5), pages 1132-1154, October.
    6. Giuseppe Bertola & Francine Blau & Lawrence Kahn, 2007. "Labor market institutions and demographic employment patterns," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(4), pages 833-867, October.
    7. David Blanchflower, 2009. "Minority self-employment in the United States and the impact of affirmative action programs," Annals of Finance, Springer, vol. 5(3), pages 361-396, June.
    8. Mark W. Nichols & Mehmet Serkan Tosun & Jingjing Yang, 2015. "The Fiscal Impact of Legalized Casino Gambling," Public Finance Review, , vol. 43(6), pages 739-761, November.
    9. Addison, John T., 2006. "Politico-Economic Causes of Labor Regulation in the United States: Rent Seeking, Alliances, Raising Rivals' Costs (Even Lowering One's Own?), and Interjurisdictional Competition," IZA Discussion Papers 2381, Institute of Labor Economics (IZA).
    10. Eunice S. Han, 2023. "The effect of changes in public sector bargaining laws on teacher union membership," British Journal of Industrial Relations, London School of Economics, vol. 61(1), pages 133-158, March.
    11. Sarah Bohn & Emily Greene Owens, 2012. "Immigration and Informal Labor," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(4), pages 845-873, October.
    12. Greenberg, Michael & Mantell, Nancy & Lahr, Michael & Frisch, Michael & White, Keith & Kehler, David, 2005. "Evaluating the economic effects of a new state-funded school building program: the prevailing wage issue," Evaluation and Program Planning, Elsevier, vol. 28(1), pages 33-45.

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