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Estimating Workers' Marginal Willingness to Pay for Safety using Linked Employer–Employee Data

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  • HARALD DALE‐OLSEN

Abstract

In this study, Norwegian linked employer–employee panel data covering 1994–96 are used to estimate workers' marginal willingness to pay (MWP) for safety, thus providing unique comparisons between estimates of MWPs from hedonic wage, quit and job duration models. Hedonic wage regressions show that higher injury hazards imply higher wages. Quit and duration regressions show that higher injury hazards imply higher job exit probabilities, while higher wages reduce the job exit probabilities. Differences in the estimated MWP figures indicate that search frictions cause sizeable bias in MWP figures from hedonic wage models, and that MWP issues should be addressed from a dynamic perspective.

Suggested Citation

  • Harald Dale‐Olsen, 2006. "Estimating Workers' Marginal Willingness to Pay for Safety using Linked Employer–Employee Data," Economica, London School of Economics and Political Science, vol. 73(289), pages 99-127, February.
  • Handle: RePEc:bla:econom:v:73:y:2006:i:289:p:99-127
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    File URL: https://doi.org/10.1111/j.1468-0335.2006.00450.x
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    Cited by:

    1. StÈphane Bonhomme & GrÈgory Jolivet, 2009. "The pervasive absence of compensating differentials," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(5), pages 763-795.
    2. Andreas Kuhn & Oliver Ruf, 2009. "The Value of a Statistical Injury: New Evidence from the Swiss Labor Market," NRN working papers 2009-15, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
    3. Van Ommeren, Jos & Graaf-de Zijl, Marloes, 2013. "Estimating household demand for housing attributes in rent-controlled markets," Journal of Housing Economics, Elsevier, vol. 22(1), pages 11-19.
    4. Van Ommeren, Jos & Koopman, Marnix, 2011. "Public housing and the value of apartment quality to households," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 207-213, May.
    5. Jos Van Ommeren & Mihails Hazans, 2008. "Workers' Valuation of the Remaining Employment Contract Duration," Economica, London School of Economics and Political Science, vol. 75(297), pages 116-139, February.
    6. Giovanni Russo & Jos Ommeren & Piet Rietveld, 2012. "The university workers’ willingness to pay for commuting," Transportation, Springer, vol. 39(6), pages 1121-1132, November.
    7. Andreas Kuhn & Oliver Ruf, 2013. "The Value of a Statistical Injury: New Evidence from the Swiss Labor Market," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 149(I), pages 57-86, March.
    8. Kuhn, Andreas & Ruf, Oliver, 2009. "The Value of a Statistical Injury: New Evidence from the Swiss Labor Market," IZA Discussion Papers 4409, Institute of Labor Economics (IZA).
    9. Van Ommeren, Jos & Fosgerau, Mogens, 2009. "Workers' marginal costs of commuting," Journal of Urban Economics, Elsevier, vol. 65(1), pages 38-47, January.

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