The Davis-Bacon Act: An appraisal of recent studies.

The intensified controversy in recent years over the Davis-Bacon Act, which requires the payment of prevailing wages on federally funded construction projects, has resulted in several new studies of the effects of that act. This invited paper reviews the evidence presented in these recent studies on several aspects of the act, including how Davis-Bacon wage determinations compare to local construction wages as measured by sources other than the act's administrators; the effects of lags in the act's data-gathering process; and the savings that would result from calculating the prevailing rate as the arithmetic mean of local wages instead of the current use of the modal rate in most cases. The authors conclude that although the cost studies to date have been faulty in several respects, it is reasonably clear that Davis-Bacon is unattractive on grounds of economic efficiency alone. The question remains, however, whether these efficiency costs are offset, partially or wholly, by the possible equity benefits of the act. (Abstract courtesy JSTOR.)