Evaluating the Economic Effects of a New State-Funded School Building Program: The Prevailing Wage Issue

Evaluation and Program Planning, Vol. 28, pp. 33-45, 2005

Posted: 2 Feb 2005  

Michael R. Greenberg

Rutgers, The State University of New Jersey - Edward J. Bloustein School of Planning and Public Policy

Nancy Mantell

Rutgers Economic Advisory Service

Michael L. Lahr

Rutgers University

Michael Frisch

University of Missouri at Kansas City - Department of Architecture, Urban Planning and Design

Keith White

Rutgers, The State University of New Jersey - Edward J. Bloustein School of Planning and Public Policy

David Kehler

Independent

Abstract

Two economic simulation models were used to study the economic impact of complying with prevailing-wage requirements in a $10 billion school construction program in New Jersey. Our econometric and input-output models suggest that compliance with the prevailing-wage statute will generate over $6 billion in personal income, a little more than $11 billion in gross state product, about 45,000 new jobs, and over $1.3 billion in state and local tax revenues will be created. If prevailing-wage requirements are not followed, there will be an impact on these results, and the extent of the impact depends markedly on the degree to which non-prevailing-wage workers spend their earnings in New Jersey and pay taxes. In general, prevailing-wage compliance has positive benefits for income and taxes. Non-prevailing wage construction should create more construction jobs, but these jobs create fewer additional jobs in the economy.

Keywords: Economic impact, school construction, jobs, income, taxes, prevailing-wage laws

JEL Classification: J51, J58, R15

Suggested Citation

Greenberg, Michael R. and Mantell, Nancy and Lahr, Michael L. and Frisch, Michael and White, Keith and Kehler, David, Evaluating the Economic Effects of a New State-Funded School Building Program: The Prevailing Wage Issue. Evaluation and Program Planning, Vol. 28, pp. 33-45, 2005. Available at SSRN: https://ssrn.com/abstract=658301

Michael Greenberg (Contact Author)

Rutgers, The State University of New Jersey - Edward J. Bloustein School of Planning and Public Policy ( email )

New Brunswick, NJ 08901
United States
(732)932-5475 (Phone)
(732)932-1771 (Fax)

HOME PAGE: http://www.policy.rutgers.edu

Nancy Mantell

Rutgers Economic Advisory Service ( email )

New Brunswick, NJ 08901-1982
United States
(732)932-3133 (Phone)
(732)932-2363 (Fax)

HOME PAGE: policy.rutgers.edu/cupr

Michael L. Lahr

Rutgers University ( email )

EJ Bloustein School of Planning & Public Policy
33 Livingston Avenue
New Brunswick, NJ 08901-1982
United States
+01(848)932-2372 (Phone)

HOME PAGE: http://bloustein.rutgers.edu/lahr/

Michael N. M. I. Frisch

University of Missouri at Kansas City - Department of Architecture, Urban Planning and Design ( email )

106E Katz Hall
5100 Rockhill Road
Kansas City, MO 64110-2499
United States
816-235-6369 (Phone)
816-235-5226 (Fax)

Keith White

Rutgers, The State University of New Jersey - Edward J. Bloustein School of Planning and Public Policy ( email )

New Brunswick, NJ 08901
United States

David Kehler

Independent

No Address Available

Paper statistics

Abstract Views
958