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The Impact of OSHA and EPA Regulation on Productivity

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Author Info
Wayne B. Gray

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Abstract

This paper presents estimates of the impact of OSHA and EPA regulation on productivity. Production information for 1450 manufacturing industries from 1958 to 1980 is merged with measures of regulation, including both information on compliance expenditures by industry and enforcement efforts by OSHA and EPA. Industries that faced higher regulation during the 1970s had significantly lower productivity growth, and a greater productivity slowdown, than industries that faced lower regulation. Under certain assumptions, the regulation is estimated to have reduced average industry productivity growth by .57 percent per year, 39 percent of the average productivity slowdown. These results are robust to variations in the model and the inclusion of other productivity determinants, including poor output growth and dependence on energy. The results also suggest a one-time cost of adjustment to regulation, so the long-run impact nay be less than that estimated here. Both OSHA and EPA are found to target their enforcement effort towards those industries that are doing poorly in meeting the goals of the regulation. However, in the only area where benefits from regulation can be examined, worker injury rates and OSHA safety inspections, no significant benefits are found.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1405.

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Date of creation: Jul 1984
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Handle: RePEc:nbr:nberwo:1405

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  1. Christainsen, Gregory B & Haveman, Robert H, 1981. "Public Regulations and the Slowdown in Productivity Growth," American Economic Review, American Economic Association, vol. 71(2), pages 320-25, May. [Downloadable!] (restricted)
  2. Scherer, F M, 1982. "Inter-Industry Technology Flows and Productivity Growth," The Review of Economics and Statistics, MIT Press, vol. 64(4), pages 627-34, November. [Downloadable!] (restricted)
  3. Gollop, Frank M & Roberts, Mark J, 1983. "Environmental Regulations and Productivity Growth: The Case of Fossil-Fueled Electric Power Generation," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 654-74, August. [Downloadable!] (restricted)
  4. W. Kip Viscusi, 1979. "The Impact of Occupational Safety and Health Regulation," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 117-140, Spring. [Downloadable!] (restricted)
  5. J. R. Norsworthy & Michael J. Harper & Kent Kunze, 1979. "The Slowdown in Productivity Growth: Analysis of Some Contributing factors," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 10(1979-2), pages 387-422. [Downloadable!]
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  1. Steven G. Allen, 1989. "Productivity Levels and Productivity Change Under Unionism," NBER Working Papers 2304, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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