State prevailing wage laws and school construction costs

Critics of prevailing wage laws claim that their elimination will cut total public construction costs by 15 to 25 percent. Justification for this assertion may be found in a 1983 study comparing the cost of public construction regulated by the Davis-Bacon Act with the cost of similar private construction. However, this study failed to account for the difference in the cost of public and private buildings absent regulation. Using E W Dodge data for 1991 to 1999, we show that the inclusion of the appropriate controls in a study of new school construction costs finds no statistically significant difference between the cost of public schools built with prevailing wage regulations.