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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:
  • Jonathan M. Lee
  • Laura O. Taylor

Abstract

Compensating wages for workplace fatality and accident risks are used to infer the value of a statistical life (VSL), which in turn is used to assess the benefits of human health and safety regulations. The estimation of these wage differentials, however, has been plagued by measurement error and omitted variables. This paper employs the first quasi-experimental design within a labor market setting to overcome such limitations in the ex-tant literature. Specifically, randomly assigned, exogenous federal safety inspections are used to instrument for plant-level risks and combined with confidential U.S. Census data on manufacturing employment to estimate the VSL using a difference-in-differences framework. The VSL is estimated to be between $2 and $4 million ($2011), suggesting prior studies may substantially overstate the value workers place on safety, and therefore, the benefits of health and safety regulations.

Suggested Citation

  • Jonathan M. Lee & Laura O. Taylor, 2014. "Randomized Safety Inspections And Risk Exposure On The Job: Quasi-Experimental Estimates Of The Value Of A Statistical Life," Working Papers 14-05, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:14-05
    as

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    File URL: https://www2.census.gov/ces/wp/2014/CES-WP-14-05.pdf
    File Function: First version, 2014
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    value of a statistical life; hedonic wage models; OSHA; quasi-experiment;

    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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