Evaluation and Program Planning, Vol. 28, pp. 33-45, 2005
Posted: 2 Feb 2005
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: 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