subject: Safety Regulation And Workplace Injuries [print this page] William P. Curington, Southern Economic Journal Vol. 53
The largest part of the public policy discussions of workplace injuries and safety management focus on the frequency in which injuries occur. This is the attitude that dominates many economic studies of either the influence of industrial safety legislation or else the general economics of occupational wellbeing and safety. Not a single one of the theoretical models of the firm's response to injury risk explicitly consider the severity of injuries. In the sphere of empirical work, Cook and Gautschi's decision that training OSHA industry citation activity reduced days lost due to injuries in Maine manufacturing firms is the solitary case in which injury severity is addressed in a study of the influence of OSHA. Chelius has used a severity measure in the sphere of empirical analysis of pre-OSHA state safety management. The main studies of the impact of courses OSHA values on injury frequency have found slight or else no influence attributable to this form of safety management.
Workplace injuries impose expenditure on firms for the reason that both human and physical capital is damaged. If injury expenditure can be presently condensed by expenditures on injury prevention, the current injury rate can be thought of as the consequence of an effort to reduce the sum of injury expenditure and injury prevention expenditure.
As a consequence, it has been assumed that OSHA values solitarily mandate a specified level of one type of safety input (i.e., either frequency reducing or else severity reducing). If there are specification values in support of both types of titan equipment, the firm must increase its safety expenditures in order to comply and both the frequency and severity of injuries would decline.
If the firm's safety fund is fixed either the values have to be violated or else non-mandated safety inputs have to be reduced. If the values are disregarded, the current frequency-severity combination will remain unchanged. If compliance is achieved by reducing non-mandated safety inputs such as employee safety training, the combination of injury frequency and injury severity rates ought to change if the mandated inputs reduce the sum of injury expenditure and injury prevention expenditure supplementary than those originally in use.
Even assuming ideal compliance and a settled inverse relationship between safety inputs and injuries, it can logically be expected that some firms will experience no change in their injury frequency or else severity rate. These firms face higher marginal injury expenditure and/or less marginal injury prevention and severity reduction expenditures and as a consequence, have secretive incentives to invest in safety in the absence of mandatory values. If this secretive investment equals or else exceeds the requirements of the mandatory values, then it can be expected that there will be no change in the amount of accident occurrences.
by: joe thorton
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