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The Impact of Workplace Conditions on Firm Performance

Listed author(s):
  • Sebastian Buhai

    ()

    (University of Aarhus, and Erasmus University Rotterdam)

  • Elena Cottini

    ()

    (University of Aarhus, and Cath. University Milan)

  • Niels Westergård-Nielsen

    ()

    (University of Aarhus)

This paper estimates the impact of work environment health and safety practice on firm performance, and examines which firm-characteristic factors are associated with good work conditions. We use Danish longitudinal register matched employer-employee data, merged with firm business accounts and detailed cross-sectional survey data on workplace conditions. This enables us to address typical econometric problems such as omitted variables bias or endogeneity in estimating i) standard production functions augmented with work environment indicators and aggregate employee characteristics and ii) firm mean wage regressions on the same explanatory variables. Our findings suggest that improvement in some of the physical dimensions of the work health and safety environment (specifically, “internal climate” and “repetitive and strenuous activity”) strongly impacts the firm productivity, whereas “internal climate” problems are the only workplace hazards compensated for by higher mean wages.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 08-077/3.

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Date of creation: 28 Aug 2008
Handle: RePEc:tin:wpaper:20080077
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