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Compensating Differentials for Occupational Health and Safety Risks: Implications of Recent Evidence

In: 50th Celebratory Volume

Author

Listed:
  • Thomas J. Kniesner
  • W. Kip Viscusi

Abstract

The most enduring measure of how individuals make personal decisions affecting their health and safety is the compensating wage differential for job safety risk revealed in the labor market via hedonic equilibrium outcomes. The decisions in turn reveal the value of a statistical life (VSL), the value of a statistical injury (VSI), and the value of a statistical life year (VSLY), which have both mortality and morbidity aspects that we describe and apply here. All such tradeoff rates play important roles in policy decisions concerning improving individual welfare. Specifically, we explicate the recent empirical research on VSL and its related concepts and link the empirical results to the ongoing examinations of many government policies intended to improve individuals' health and longevity. We pay special attention to recent issues such as the COVID pandemic and newly emerging foci on distributional consequences concerning which demographic groups may benefit most from certain regulations.

Suggested Citation

  • Thomas J. Kniesner & W. Kip Viscusi, 2023. "Compensating Differentials for Occupational Health and Safety Risks: Implications of Recent Evidence," Research in Labor Economics, in: 50th Celebratory Volume, volume 50, pages 83-116, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:rleczz:s0147-912120230000050003
    DOI: 10.1108/S0147-912120230000050003
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    More about this item

    Keywords

    Value of statistical life; VSL; value of statistical injury; VSI; value of a statistical life year; VSLY; mortality risk; morbidity risk; benefit-cost analysis; hedonic labor market equilibrium; compensating wage differential; evaluation of health and safety programs; J17; I18; H40; K32; J28;
    All these keywords.

    JEL classification:

    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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