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Prevailing wage laws and construction labor markets

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  • Daniel P. Kessler
  • Lawrence F. Katz

Abstract

Prevailing wage laws, which require that construction workers employed by private contractors on public projects be paid wages and benefits at least equal to those 'prevailing' for similar work in or near the locality in which the project is located, have been the focus of an extensive policy debate. The authors, analyzing Current Population Survey data and Census data, find that the relative wages of construction workers declined 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 sizable reduction in the union wage premium and an appreciable narrowing of the black/non-black wage differential for construction workers. (Author's abstract.)

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Bibliographic Info

Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 54 (2001)
Issue (Month): 2 (January)
Pages: 259-274

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Handle: RePEc:ilr:articl:v:54:y:2001:i:2:p:259-274

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References

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  1. D. N. Gujarati, 1967. "The Economics of the Davis-Bacon Act," The Journal of Business, University of Chicago Press, vol. 40, pages 303.
  2. Robert S. Goldfarb & John S. Morrall III, 1981. "The Davis-Bacon Act: An appraisal of recent studies," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 34(2), pages 191-206, January.
  3. Allen, Steven G, 1987. "Can Union Labor Ever Cost Less?," The Quarterly Journal of Economics, MIT Press, vol. 102(2), pages 347-73, May.
  4. Allen, Steven G, 1983. "Much Ado about Davis-Bacon: A Critical Review and New Evidence," Journal of Law and Economics, University of Chicago Press, vol. 26(3), pages 707-36, October.
  5. Orley Ashenfelter, 1971. "Racial Discrimination and Trade Unionism," Working Papers 390, Princeton University, Department of Economics, Industrial Relations Section..
  6. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
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Cited by:
  1. David Neumark, 2001. "Living Wages: Protection For or Protection From Low-Wage Workers?," NBER Working Papers 8393, National Bureau of Economic Research, Inc.
  2. Blanchflower, David G., 2007. "Entrepreneurship in the United States," IZA Discussion Papers 3130, Institute for the Study of Labor (IZA).
  3. Giuseppe Bertola & Francine D. Blau & Lawrence M. Kahn, 2002. "Labor Market Institutions and Demographic Employment Patterns," NBER Working Papers 9043, National Bureau of Economic Research, Inc.
  4. 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 for the Study of Labor (IZA).
  5. Dunn, Sarah & Quigley, John M. & Rosenthal, Larry A., 2005. "The Effects of Prevaling Wage Requirements on the Cost of Low-Income Housing," Berkeley Program on Housing and Urban Policy, Working Paper Series qt9621c051, Berkeley Program on Housing and Urban Policy.
  6. David G. Blanchflower & Jon Wainwright, 2005. "An Analysis of the Impact of Affirmative Action Programs on Self-Employment in the Construction Industry," NBER Working Papers 11793, National Bureau of Economic Research, Inc.
  7. David G. Blanchflower, 2008. "Minority Self-Employment in the United States and the Impact of Affirmative Action Programs," NBER Working Papers 13972, National Bureau of Economic Research, Inc.
  8. Clifford Winston, 2013. "On the Performance of the U.S. Transportation System: Caution Ahead," Journal of Economic Literature, American Economic Association, vol. 51(3), pages 773-824, September.

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