Mark J. Prus

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. Using F. 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.

Marital status, children and women's labor market choices

Abstract This article provides a test of the human capital prediction that women with more labor force intermittence hold occupations characterized by lower earnings penalties for intermittence. By using marital and family status as proxies of labor market commitment we find that, on average, married women with and without children spend more time out of the labor force than never-married, childless women. Results from earnings regressions fail to indicate that the occupations they hold are characterized by significantly lower penalties for time not working. However, results from a probit model indicate that a womans marital status, the presence of children, and the level of the husbands education significantly affect the probability of working. The results reported here suggest that human capital theory explains a womans decision to work, but does not necessarily explain her occupational choice.

Prevailing wage legislation and public school construction efficiency: A stochastic frontier approach

Stochastic frontier regression is used to examine the effect of introducing prevailing wage legislation on public school construction efficiency in British Columbia. Prior to the legislation, public school projects were from 16% to 19% smaller, in terms of square feet, than comparable private structures. However, likelihood ratio tests consistently indicate that the coefficients measuring the effect of the policy on the size differential between covered and uncovered projects are not statistically different from zero. These results suggest that construction wage requirements did not alter input utilisation in a way that significantly affected construction output. Average inefficiency for school construction in British Columbia over the period of the study is 12.1%.

The effects of prevailing wage regulations on construction efficiency in British Columbia

This study examines the effect of prevailing wage legislation on the efficiency of school construction. Specifically, stochastic frontier regression and British Columbian construction data are used to measure the effect of the introduction and expansion of prevailing wage requirements on technical efficiency, or the ability of builders to obtain maximum output from available resources. Results indicate that average technical efficiency for all construction projects in the sample is 94.6%. Average efficiency for projects covered by the introductory stage of British Columbias construction wage legislation is 86.6%. By the time of the expansion of the wage policy 17 months later, the average efficiency of covered projects increased to 99.8%. These findings suggest that the introduction of prevailing wage laws disrupted construction efficiency. However, in a relatively short period, the construction industry adjusted to wage requirements by increasing overall efficiency. A short-term decrease in construction efficiency, followed by a sharp and durable increase, supports that view that prevailing wage laws are not associated with higher, long-term construction costs.

Using stochastic frontier regression to estimate the construction cost inefficiency of prevailing wage laws

Purpose – The aim of this paper is to use stochastic frontier regression to measure the effect of the introduction and expansion of prevailing wage requirements on the cost efficiency of public school construction in British Columbia. The results provide evidence from a specific sector and location that contributes to the accumulated evidence on the topic.Design/methodology/approach – Stochastic frontier regression is used to measure the effect of the introduction and expansion of prevailing wage requirements on the cost efficiency of public school construction in British Columbia. The results of a likelihood ratio test indicate that stochastic frontier regression is preferred to OLS cost estimation because of the presence of statistically different cost inefficiencies across a sample of covered and uncovered projects.Findings – Specifically, projects covered by the introductory stage of the wage requirements are significantly less cost efficient compared to other public school projects. However, by the t...

Prevailing Wage Regulations and School Construction Costs: Cumulative Evidence from British Columbia

The effect of prevailing wage laws on the cost of public construction has been the subject of an ongoing public policy debate. We measure this effect by comparing the public/private construction cost differential for schools built before and after British Columbias Skills Development and Fair Wage Policy. Regression results indicate that public schools were 40.5 percent more expensive to build prior to the policy. This differential was 40.1 percent after the policys enforcement. However, this change is not statistically significant. Regression results also indicate a stable construction cost function over the policy period. These results indicate that the effect of fair wage requirements was not different from zero in terms of magnitude or statistical significance. Combining these results with the findings of our previous research provides a comprehensive view regarding the effect of the British Columbian prevailing wage policy on school construction. This body of research, utilizing a variety of statistical methods, provides consistent evidence indicating that a relatively strong prevailing wage policy was not associated with changes in the efficiency or productivity of construction that contributes to increased building costs.

Starting wages of women in female and male occupations: A test of the human capital explanation of occupational sex segregation

Abstract Using mature women from the National Longitudinal Survey of Labor Market Experience we test the human capital propositions that predominantly female occupations are characterized by relatively higher starting wages and lower penalties for time spent out of the labor market. An examination of average hourly wage rates by level of work experience failed to indicate the kind of statistically significant starting wage differentials that would support an explanation of occupational sex segregation based on choice. Regression results indicate that predominantly female occupations offer significantly lower starting wages and higher penalty rates relative to predominantly male occupations. We fail to observe the kind of economic incentives suggested by human capital theory that would lead women to choose to work in traditionally female occupations. The findings of this study suggest that future research should address the roles of labor market discrimination and sex role socialization in explaining occupational sex segragation.