Prevailing Wage Laws and Construction Labor Markets
Daniel P. Kessler
Stanford Graduate School of Business; National Bureau of Economic Research (NBER)
Lawrence F. Katz
Harvard University - Department of Economics; National Bureau of Economic Research (NBER)
Stanford Law and Economics Olin Working Paper No. 186
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.
Number of Pages in PDF File: 34
JEL Classification: J38, J58working papers series
Date posted: October 12, 2000
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