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Prevailing wage laws and construction labor markets

  • Daniel P. Kessler
  • Lawrence F. Katz

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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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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  1. 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.
  2. D. N. Gujarati, 1967. "The Economics of the Davis-Bacon Act," The Journal of Business, University of Chicago Press, vol. 40, pages 303.
  3. Steven G. Allen, 1986. "Can Union Labor Ever Cost Less?," NBER Working Papers 2019, National Bureau of Economic Research, Inc.
  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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