Worker Investments in Safety, Workplace Accidents, and Compensating Wage Differentials

Abstract

The theory of compensating wage differentials (CWDs) assumes that firms supply and workers demand workplace safety, predicting a positive relationship between accident risk and wages. This article allows for safety provision by workers, which predicts a countervailing negative relationship between individual risk and wages: Firms pay higher wages for higher safety-related productivity. Using National Longitudinal Survey of Youth panel data and data on fatal and nonfatal accidents, our precise CWDs imply a value of a statistical injury of $45.4 thousand and a value of a statistical life of $6.3 million. In line with our model, individual risk and wages are negatively correlated. * Manuscript

Occupational Injuries and Wage Differentials in Turkey

“…An alternative approach is to consider that the risk may be endogenous to the worker where the worker takes less risk. Guardo and Ziebarth (2019, p. 134) 22 provide evidence of the various institutional arrangements that provide incentives for the workers' risk averse behavior that also contributes to firms' profits and develop a model where "workers also supply safety and firms demand it. In turn, the firm pays higher wages for workers' provision of safety.…”

Climate Change and Occupational Health: Are There Limits to Our Ability to Adapt?

“…Another related economics literature examines the relationship between work and health more generally (e.g., Anderson and Marmot 2012; Case and Deaton 2005;Fletcher, Sindelar, and Yamaguchi 2011; Guardado and Ziebarth 2018;Morefield, Ribar, and Ruhm 2012;Schmitz 2016). This paper contributes to this literature by providing evidence on how the environment factors into this relationship.…”

“…For more information on compensating wage differentials, refer toGuardado and Ziebarth (2018),Kniesner et al (2012),Powell and Shan (2012), andViscusi and Aldy (2003). For more information on experience rating in WC and its effects on firms' and workers' safety incentives, refer to Campolieti and Hyatt (2006),Hunt and Dillender (2017), andRuser (1991).…”

Health Shocks, Human Capital, and Labor Market Outcomes

“…First, better-educated individuals tend to engage in fewer unhealthy behaviors, such as smoking (e.g., Jürges, Reinhold, and Salm, 2011) and behaviors leading to obesity (e.g., Brunello, Fabbri, and Fort, 2013). 1 Second, individuals with higher levels of education are more likely to work in white-collar occupations (e.g., Autor and Handel, 2013;Speer, 2017), which are less intensive in manual tasks and thus less likely to cause workplace accidents or exposure to unsafe conditions (e.g., Guardado and Ziebarth, 2016). 2 Finally, better-educated individuals may have better access to health care or be more efficient producers of health (e.g., Lange, 2011;Jeon and Pohl, 2017).…”