Prevailing Wage Laws and Construction Labor Markets

33 Pages Posted: 5 May 2000 Last revised: 2 Apr 2001

See all articles by Daniel P. Kessler

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)

Multiple version iconThere are 2 versions of this paper

Date Written: December 1999

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.

Suggested Citation

Kessler, Daniel Philip and Katz, Lawrence F., Prevailing Wage Laws and Construction Labor Markets (December 1999). NBER Working Paper No. w7454. Available at SSRN: https://ssrn.com/abstract=213888

Daniel Philip Kessler (Contact Author)

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Lawrence F. Katz

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