An Application of Difference-in-Difference-Difference Model: Effects of Prevailing Wage Legislation in Mountain States of the United States

Source: Thomas Russell Harris, Sankar Mukhopadhyay, Nathan Wiseman, Public Works Management Policy, OnlineFirst, Published online before print September 6, 2016
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From the abstract:
Institutional laws and arrangements such as prevailing wage laws influence the employment levels and wage rates of the local labor supply. Conflicting research, however, has shown that prevailing wage laws lead to higher construction costs, while others show little to no relationship. Most of these studies are completed at the national level whose results at the regional level may not be applicable. This article examines the impact of prevailing wage laws on construction wages in the Mountain States of the nation. Difference-in-difference-difference models were used, and results indicate that for the Mountain States, removal of prevailing wage laws decreased wages by 4.4% after 10 years of the repeal. However, because of the available data used in this analysis, the impacts of repealing the prevailing wage laws on benefits could not be determined, which from previous research could be significant.