The Illinois Update

Kentucky’s 2017 repeal of prevailing wage failed to provide any cost savings on road construction projects.

That’s the takeaway from a new peer-reviewed article in Public Works Management & Policy authored by ILEPI’s Frank Manzo IV, former ILEPI Midwest Researcher Jill Gigstad, and Colorado State University-Pueblo Distinguished Professor of Economics Kevin Duncan, PhD.

Researchers used data on 2,155 Kentucky Transportation Cabinet highway projects between 2014 and 2020 and found no statistically significant impact of the 2017 repeal of prevailing wage on bid costs and competition. State-funded highway projects averaged about 1.6 bidders both before and after repeal. The analysis accounted for project size and complexity, the location of the project, the asphalt price index, and other important factors.

“The wave of repeals of prevailing wage laws in six states between 2015 and 2018 was largely motivated by desires to reduce public construction costs,” the researchers write. “This study finds that…

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