IDEAS home Printed from https://ideas.repec.org/a/bla/brjirl/v60y2022i4p761-783.html

Should prevailing wages prevail? Re‐examining the effect of prevailing wage laws on affordable housing construction costs

Author

Listed:
  • Matthew Hinkel
  • Dale Belman

Abstract

The United States faces two parallel crises: one with affordable housing supply, and one with maintaining residential construction labour standards. Historically, issues with labour standards have been addressed on public works through prevailing wage requirements. Labor standards—while good for workers—may increase construction costs; higher costs, in turn, negatively impact low‐income families by reducing supplies of affordable housing. In this article, we re‐examine whether this trade‐off exists and, if so, its implications. We estimate that prevailing wage requirements add, at most, 6 per cent to the costs of affordable housing construction.

Suggested Citation

  • Matthew Hinkel & Dale Belman, 2022. "Should prevailing wages prevail? Re‐examining the effect of prevailing wage laws on affordable housing construction costs," British Journal of Industrial Relations, London School of Economics, vol. 60(4), pages 761-783, December.
    • Handle: RePEc:bla:brjirl:v:60:y:2022:i:4:p:761-783
    DOI: 10.1111/bjir.12663
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/bjir.12663
    Download Restriction: no
    File URL: https://libkey.io/10.1111/bjir.12663?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Mark Erlich, 2021. "Misclassification in Construction: The Original Gig Economy," ILR Review, Cornell University, ILR School, vol. 74(5), pages 1202-1230, October.
    2. Matthew Palm & Deb Niemeier, 2018. "Does Placing Affordable Housing Near Rail Raise Development Costs? Evidence From California’s Four Largest Metropolitan Planning Organizations," Housing Policy Debate, Taylor & Francis Journals, vol. 28(2), pages 180-198, March.
    3. Barry T. Hirsch & David A. MacPherson, 2003. "Union Membership and Coverage Database from the Current Population Survey: Note," ILR Review, Cornell University, ILR School, vol. 56(2), pages 349-354, January.
    4. Kevin C. Duncan, 2015. "The Effect of Federal Davis-Bacon and Disadvantaged Business Enterprise Regulations on Highway Maintenance Costs," ILR Review, Cornell University, ILR School, vol. 68(1), pages 212-237, January.
    5. Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-529, October.
    6. Sarah Dunn & John M. Quigley & Larry A. Rosenthal, 2005. "The Effects of Prevailing Wage Requirements on the Cost of Low-Income Housing," ILR Review, Cornell University, ILR School, vol. 59(1), pages 141-157, October.
    7. William Blankenau & Steven Cassou, 2011. "Industry estimates of the elasticity of substitution and the rate of biased technological change between skilled and unskilled labour," Applied Economics, Taylor & Francis Journals, vol. 43(23), pages 3129-3142.
    8. Kevin Duncan & Peter Philips & Mark Prus, 2014. "Prevailing Wage Regulations and School Construction Costs: Cumulative Evidence from British Columbia," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(4), pages 593-616, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kevin Duncan & Peter Philips & Mark Prus, 2014. "Prevailing Wage Regulations and School Construction Costs: Cumulative Evidence from British Columbia," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(4), pages 593-616, October.
    2. Madanizadeh, Seyed Ali, 2021. "International trade, skill premium and endogenous labor division: The case of Mexico," Labour Economics, Elsevier, vol. 71(C).
    3. Monteiro, Pedro & Suleymanov, Masim, 2025. "Government contracts and labor investment efficiency," Journal of Corporate Finance, Elsevier, vol. 92(C).
    4. Qazi Haque & Leandro M. Magnusson, 2020. "Identification robust empirical evidence on the Euler equation in open economies," Economics Discussion / Working Papers 20-01, The University of Western Australia, Department of Economics.
    5. Cho, Seo-young & Vadlamannati, Krishna Chaitanya, 2010. "Compliance for big brothers: An empirical analysis on the impact of the anti-trafficking protocol," University of Göttingen Working Papers in Economics 118, University of Goettingen, Department of Economics.
    6. B. James Deaton & Getu Hailu & Xiaoye Zhou, 2014. "Poverty in Canada: Does Manufacturing Matter?," Growth and Change, Wiley Blackwell, vol. 45(2), pages 362-376, June.
    7. Daniel Fernandes & John G. Lynch & Richard G. Netemeyer, 2014. "Financial Literacy, Financial Education, and Downstream Financial Behaviors," Management Science, INFORMS, vol. 60(8), pages 1861-1883, August.
    8. Vieira, Flávio & MacDonald, Ronald & Damasceno, Aderbal, 2012. "The role of institutions in cross-section income and panel data growth models: A deeper investigation on the weakness and proliferation of instruments," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 127-140.
    9. Alston Lee J. & Mueller Bernardo, 2018. "Priests, Conflicts and Property Rights: the Impacts on Tenancy and Land Use in Brazil," Man and the Economy, De Gruyter, vol. 5(1), pages 1-26, June.
    10. Waters, George A., 2013. "Quantity rationing of credit and the Phillips curve," Journal of Macroeconomics, Elsevier, vol. 37(C), pages 68-80.
    11. Barry T. Hirsch, 2004. "Reconsidering Union Wage Effects: Surveying New Evidence on an Old Topic," Journal of Labor Research, Transaction Publishers, vol. 25(2), pages 233-266, April.
    12. McCausland, David & Pouliakas, Konstantinos & Theodossiou, Ioannis, 2005. "Some are Punished and Some are Rewarded: A Study of the Impact of Performance Pay on Job Satisfaction," MPRA Paper 14243, University Library of Munich, Germany.
    13. Morricone, Serena & Munari, Federico & Oriani, Raffaele & de Rassenfosse, Gaetan, 2017. "Commercialization Strategy and IPO Underpricing," Research Policy, Elsevier, vol. 46(6), pages 1133-1141.
    14. Joseph P. Byrne & Alexandros Kontonikas & Alberto Montagnoli, 2013. "International Evidence on the New Keynesian Phillips Curve Using Aggregate and Disaggregate Data," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(5), pages 913-932, August.
    15. Hausman, Jerry & Stock, James H. & Yogo, Motohiro, 2005. "Asymptotic properties of the Hahn-Hausman test for weak-instruments," Economics Letters, Elsevier, vol. 89(3), pages 333-342, December.
    16. Hebous, Shafik & Zimmermann, Tom, 2014. "Revisiting the Narrative Approach of Estimating Fiscal Multipliers," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100408, Verein für Socialpolitik / German Economic Association.
    17. Chan-Jane Lin & Tawei Wang & Chao-Jung Pan, 2016. "Financial reporting quality and investment decisions for family firms," Asia Pacific Journal of Management, Springer, vol. 33(2), pages 499-532, June.
    18. Hilber, Christian A.L., 2010. "New housing supply and the dilution of social capital," Journal of Urban Economics, Elsevier, vol. 67(3), pages 419-437, May.
    19. Sheikh, Shahbaz, 2018. "The impact of market competition on the relation between CEO power and firm innovation," Journal of Multinational Financial Management, Elsevier, vol. 44(C), pages 36-50.
    20. Kilenthong, Weerachart T. & Boonsanong, Khanista & Duangchaiyoosook, Sartja & Jantorn, Wasinee & Khruapradit, Varunee, 2023. "Learning losses from school closure due to the COVID-19 pandemic for Thai kindergartners," Economics of Education Review, Elsevier, vol. 96(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:brjirl:v:60:y:2022:i:4:p:761-783. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.