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Workplace risks and wages: Canadian evidence from alternative models

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  • Morley Gunderson
  • Douglas Hyatt

Abstract

Three alternative models of compensating wage premiums for risk are estimated: the conventional OLS wage regression; an endogenous risk model that accounts for the simultaneity that may occur if workers of high potential earnings prefer safer jobs; and a self-selection model to account for the possibility that workers sort into jobs based on unobserved tolerance for risk that affects their productivity in dangerous work environments. The results suggest that the existing Canadian estimates, which have been based on the basic model, may seriously underestimate the wage premium for risk and hence the implied cost of fatal and non-fatal injuries.

Suggested Citation

  • Morley Gunderson & Douglas Hyatt, 2001. "Workplace risks and wages: Canadian evidence from alternative models," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 377-395, May.
    • Handle: RePEc:cje:issued:v:34:y:2001:i:2:p:377-395
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    Citations

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    Cited by:

    1. Marcela Parada-Contzen & Andrés Riquelme-Won & Felipe Vasquez-Lavin, 2013. "The value of a statistical life in Chile," Empirical Economics, Springer, vol. 45(3), pages 1073-1087, December.
    2. Bellavance, Franois & Dionne, Georges & Lebeau, Martin, 2009. "The value of a statistical life: A meta-analysis with a mixed effects regression model," Journal of Health Economics, Elsevier, vol. 28(2), pages 444-464, March.
    3. Polat, Sezgin, 2013. "Wage Compensation for Risk: The Case of Turkey," GIAM Working Papers 13-11, Galatasaray University Economic Research Center.
    4. Dionne, Georges & Lebeau, Martin, 2010. "Le calcul de la valeur statistique d’une vie humaine," L'Actualité Economique, Société Canadienne de Science Economique, vol. 86(4), pages 487-530, décembre.
    5. Heywood, John S. & Siebert, W. Stanley & Wei, Xiangdong, 2005. "The Implicit Costs and Benefits of Family Friendly Work Practices," IZA Discussion Papers 1581, Institute of Labor Economics (IZA).
    6. Danielle Lamb & Rafael Gomez & Milad Moghaddas, 2022. "Unions and hazard pay for COVID‐19: Evidence from the Canadian Labour Force Survey," British Journal of Industrial Relations, London School of Economics, vol. 60(3), pages 606-634, September.
    7. Jin-Long Liu & Chia-Hui Huang & Chih-Hai Yang, 2013. "Technological Change, Job Risk, and Wage Premium: Evidence from Taiwan," The Developing Economies, Institute of Developing Economies, vol. 51(2), pages 186-202, June.
    8. Ikuho Kochi & Bryan Hubbell & Randall Kramer, 2006. "An Empirical Bayes Approach to Combining and Comparing Estimates of the Value of a Statistical Life for Environmental Policy Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(3), pages 385-406, July.
    9. John F. Helliwell & Haifang Huang, 2010. "How's the Job? Well-Being and Social Capital in the Workplace," ILR Review, Cornell University, ILR School, vol. 63(2), pages 205-227, January.
    10. Keith A. Bender & Hosne A. Mridha & James Peoples, 2006. "Risk Compensation for Hospital Workers: Evidence from Relative Wages of Janitors," ILR Review, Cornell University, ILR School, vol. 59(2), pages 226-242, January.
    11. Benkhalifa, Abdelaziz, 2014. "Rôle du syndicat dans la détermination de la valeur de la vie statistique en Tunisie [Trade union role in determining the value of a statistical life in Tunisia]," MPRA Paper 63736, University Library of Munich, Germany.
    12. Alberto Dávila & Marie T. Mora & Rebecca González, 2011. "English-Language Proficiency and Occupational Risk Among Hispanic Immigrant Men in the United States," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(2), pages 263-296, April.
    13. W. Kip Viscusi & Clayton Masterman, 2017. "Anchoring biases in international estimates of the value of a statistical life," Journal of Risk and Uncertainty, Springer, vol. 54(2), pages 103-128, April.

    More about this item

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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