Work-Related Accidents and the Production Process
The extent to which the incidence of work-related accidents can be considered a phenomenon responsive to economic incentives is examined in this paper. A joint output, multi-input translog production model is developed in which the relationship between wage costs and risk is estimated along with the technological parameters of the production process. Estimates for six manufacturing industries show a statistically significant opportunity cost of reductions in injuries and a statistically significant relationship between wage costs and injury risk. The results also provide some evidence that labor markets sort the most risk-averse workers to the safer industries. Simulations based on production technology indicate that relatively large taxes are needed to induce reductions in the incidence of injuries.
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