Do PLAs Raise Costs? The Peer-Reviewed Evidence Says No

More Than 1,000 Public Projects Studied. No Cost Increase Found.

Do PLAs raise costs? It is the first question public officials hear when a project comes up for a vote, and it has a clear answer. Decades of peer-reviewed research on project labor agreements show that these prehire contracts do not increase what taxpayers pay for public construction. The strongest studies, covering more than 1,000 projects and thousands of competitive bids, find no statistically significant cost effect.

What Peer-Reviewed Research Shows

The cost question has been studied for more than two decades. Philips and Waitzman (2021), published in Public Works Management and Policy, examined 263 bid openings on California community college projects and found that PLAs did not reduce the number of bidders or drive up winning bids. An earlier peer-reviewed study of Massachusetts school construction reached the same conclusion after controlling for dozens of project characteristics. The ICERES research review by economists Russell Ormiston and Kevin Duncan surveyed the full body of academic work and found no reliable evidence that PLAs increase construction costs.

> READ MORE: What is a PLA?

The Largest Study to Date

In 2025, researchers at the Illinois Economic Policy Institute and the University of Illinois published the largest analysis of PLA outcomes ever conducted. The study examined 2,574 bids on 773 Illinois Capital Development Board projects worth $1.2 billion, including 499 built under PLAs and 274 without them. The findings were unambiguous:

• PLAs had no effect on total construction costs after accounting for project size, complexity, location and type
• PLAs increased bid competition by an average of 14%
• Each additional bid improved the likelihood that a project came in below its engineer’s estimate

What Competition Means for Budgets

The Illinois findings matter because bid competition is the strongest lever a public owner has on price. More bidders mean sharper pencils, and the study found each additional bid meaningfully improved the odds that a project would be awarded below its official engineer’s estimate. The same research found PLAs expanded opportunity in the bidding pool, increasing market share for firms owned by military veterans, women and people of color by as much as 2%. An agreement that draws more contractors into public work while holding costs flat is the opposite of the cost driver critics describe.

Why the Cost Myth Persists

Claims that PLAs inflate costs trace back to reports that compare dissimilar projects without controlling for size, complexity or market conditions. When researchers correct for those factors, the cost effect disappears. That is why the peer-reviewed literature and the advocacy literature reach such different conclusions, and why the question do PLAs increase costs deserves an evidence-first answer rather than a talking point.

> READ MORE: Do PLAs increase costs? Here is what the research shows

What PLAs Deliver Instead

PLAs give public owners schedule certainty on complex, multi-craft projects. They prevent strikes and lockouts, standardize work rules across trades and guarantee a steady supply of skilled labor. The Eastern Atlantic States Regional Council of Carpenters puts 42,000 trained union carpenters behind that guarantee. For taxpayers, the result is projects that finish on time, on budget and built to last.

Timeliness carries a price tag too. Public projects that slip their schedules rack up financing costs, escalation and disruption for the schools, hospitals and communities waiting on them. By taking strikes and lockouts off the table and settling disputes through arbitration, PLAs protect the completion dates that budgets are built around. Peer-reviewed work on public construction timeliness points the same direction as the cost research: the agreements help projects finish when they are supposed to finish, which is its own form of savings for taxpayers.

Frequently Asked Questions

Do PLAs raise costs on public construction projects?

No. Peer-reviewed studies and the largest state-level analyses find no statistically significant effect on total construction costs once project size, complexity and location are taken into account.

What is the largest study of PLA costs?

A 2025 analysis of 2,574 bids on 773 Illinois Capital Development Board projects found PLAs had no effect on costs and increased bid competition by 14%.

Do PLAs reduce the number of bidders?

No. A peer-reviewed study of 263 California community college bid openings found PLAs did not reduce bidder turnout, and Illinois data showed bidding increased.

Can non-union contractors bid on PLA projects?

Yes. Public PLA projects use open, competitive bidding, and non-union firms regularly bid and win work on projects covered by these agreements.

Do PLAs delay projects?

No. Research links PLAs to on-time completion because they prevent strikes and lockouts and harmonize schedules across every trade on the job.

Why do some reports claim PLAs raise costs?

Those reports typically compare dissimilar projects without controlling for size, complexity or market conditions. Peer-reviewed studies that control for those factors find no cost effect.

Do PLAs help small and diverse contractors?

Yes. The Illinois study found PLAs increased market share for firms owned by veterans, women and people of color by as much as 2%.

How do PLAs protect taxpayers?

More bids mean more competition. Illinois researchers found each additional bid raised the likelihood that a project would come in below its engineer’s estimate.

Where can readers review the research on PLA costs?

The ICERES research review compiles the peer-reviewed literature, and this site maintains a full breakdown of the cost question with links to every major study.

READ MORE: Project labor agreements do not raise costs, research review finds