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Prevailing Wage Laws and Construction Labor Markets

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Author Info
Daniel P. Kessler
Lawrence Katz

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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.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7454.

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Date of creation: Dec 1999
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Publication status: published as Kessler, Daniel P. and Lawrenc F. Katz. "Prevailing Wage Laws And Construction Labor Markets," International Labor Relations Review, 2001, v54(2,Jan), 259-274.
Handle: RePEc:nbr:nberwo:7454

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  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. [Downloadable!] (restricted)
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  4. Ashenfelter, Orley, 1972. "Racial Discrimination and Trade Unionism," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages 435-64, May-June. [Downloadable!] (restricted)
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  5. 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. [Downloadable!] (restricted)
  6. Allen, Steven G, 1983. "Much Ado about Davis-Bacon: A Critical Review and New Evidence," Journal of Law & Economics, University of Chicago Press, vol. 26(3), pages 707-36, October.
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  1. David Neumark, 2001. "Living Wages: Protection For or Protection From Low-Wage Workers?," NBER Working Papers 8393, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. 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. [Downloadable!] (restricted)
    Other versions:
  3. John T. Addison, 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). [Downloadable!]
  4. Bertola, Giuseppe & Blau, Francine D & Kahn, Lawrence, 2002. "Labour Market Institutions and Demographic Employment Patterns," CEPR Discussion Papers 3448, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  5. David G. Blanchflower, 2007. "Entrepreneurship in the United States," IZA Discussion Papers 3130, Institute for the Study of Labor (IZA). [Downloadable!]
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