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Randomized Safety Inspections and Risk Exposure on the Job: Quasi-Experimental Estimates of the Value of a Statistical Life

Author

Listed:
  • Lee, Jonathan M.
  • Taylor, Laura O.

Abstract

The value of a statistical life (VSL) is a critical driver of estimated benefits for federal policies designed to improve human health, safety, and environmental exposures. The vast majority of empiri-cal evidence on the magnitude of the VSL arises from hedonic wage models that have been plagued by measurement error and omitted variables. This paper employs randomly assigned workplace safety inspections to instrument for plant-level risks in a quasi-experimental design to address these limitations. We provide credi-ble causal evidence for the existence of compensating wages for fa-tality risks and estimate a VSL between $8 and $10 million ($2016).

Suggested Citation

  • Lee, Jonathan M. & Taylor, Laura O., "undated". "Randomized Safety Inspections and Risk Exposure on the Job: Quasi-Experimental Estimates of the Value of a Statistical Life," CEnREP Working Papers 264973, North Carolina State University, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:cenrep:264973
    DOI: 10.22004/ag.econ.264973
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    2. Cropper, Maureen L. & Joiner, Emily & Krupnick, Alan, 2023. "Revisiting the Environmental Protection Agency’s Value of a Statistical Life," RFF Working Paper Series 23-30, Resources for the Future.
    3. Islam, Emdad & Loriot, Blake & Rahman, Lubna, 2025. "The impact of product market competition on workplace safety," Journal of Corporate Finance, Elsevier, vol. 93(C).
    4. Gianmarco León & Edward Miguel, 2017. "Risky Transportation Choices and the Value of a Statistical Life," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 202-228, January.
    5. Matthew S. Johnson & Daniel Schwab & Patrick Koval, 2022. "Legal Protection Against Retaliatory Firing Improves Workplace Safety," Working Papers 2203, College of the Holy Cross, Department of Economics.
    6. Herrera-Araujo, Daniel & Rochaix, Lise, 2020. "Does the Value per Statistical Life vary with age or baseline health? Evidence from a compensating wage study in France," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    7. Ketcham, Jonathan & Kuminoff, Nicolai & Saha, Nirman, 2023. "Valuing Statistical Life Using Seniors’ Medical Spending," RFF Working Paper Series 23-16, Resources for the Future.
    8. Hammitt, James K. & Treich, Nicolas, 2021. "Fatality Risk Regulation," TSE Working Papers 21-1177, Toulouse School of Economics (TSE).
    9. Colmer, Jonathan & Voorheis, John, 2020. "The grandkids aren't alright: the intergenerational effects of prenatal pollution exposure," LSE Research Online Documents on Economics 108495, London School of Economics and Political Science, LSE Library.
    10. Kathleen Segerson & Catherine L. Kling & Nancy E. Bockstael, 2022. "Contributions of women at the intersection of agricultural economics and environmental and natural resource economics," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(1), pages 38-53, March.
    11. Joseph Richardson, 2025. "Health risks and labour supply: evidence from the COVID‐19 pandemic," Economica, London School of Economics and Political Science, vol. 92(367), pages 959-978, July.
    12. Bishop, Kelly C. & Kuminoff, Nicolai V. & Mathes, Sophie M. & Murphy, Alvin D., 2024. "The marginal cost of mortality risk reduction: Evidence from housing markets," Journal of Urban Economics, Elsevier, vol. 139(C).
    13. Joseph Richardson, 2023. "Health Risks and Labour Supply," Working Papers 379420583, Lancaster University Management School, Economics Department.
    14. Aldy, Joseph E. & Atkinson, Giles & Kotchen, Matthew J., 2021. "Environmental benefit-cost analysis: a comparative analysis between the United States and the United Kingdom," LSE Research Online Documents on Economics 110879, London School of Economics and Political Science, LSE Library.
    15. Gabriele Curci & Domenico Depalo & Alessandro Palma, 2023. "The Dirtier You Breathe, The Less Safe You Are. The Effect of Air Pollution on Work Accidents," CEIS Research Paper 554, Tor Vergata University, CEIS, revised 24 May 2023.
    16. Castañeda Dower, Paul & Markevich, Andrei & Weber, Shlomo, 2021. "The value of a statistical life in a dictatorship: Evidence from Stalin," European Economic Review, Elsevier, vol. 133(C).
    17. Massimo Anelli & Felix Koenig, 2021. "Willingness to Pay for Workplace Safety," CESifo Working Paper Series 9469, CESifo.
    18. Nicolai V. Kuminoff, 2018. "Can Understanding Spatial Equilibria Enhance Benefit Transfers for Environmental Policy Evaluation?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(3), pages 591-608, March.
    19. Michael D. Makowsky & Kelsey Roberts Bacon, 2026. "The wages of irregular tasks: workers’ compensation benefits and occupational misclassification," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 51(1), pages 1-40, March.
    20. Ling Li & Perry Singleton, 2021. "The Effect of Industrial Robots on Workplace Safety," Center for Policy Research Working Papers 239, Center for Policy Research, Maxwell School, Syracuse University.
    21. Ferreira, Susana & de Morentin, Sara Martínez & Erro-Garcés, Amaya, 2025. "Measuring job risks when hedonic wage models do not do the job," Journal of Environmental Economics and Management, Elsevier, vol. 130(C).
    22. Sam Desiere & Christian Walter, 2025. "The Shift Premium: Evidence From a Discrete Choice Experiment," British Journal of Industrial Relations, London School of Economics, vol. 63(3), pages 508-524, September.

    More about this item

    Keywords

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    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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