Recessions are bad for workplace safety

Abstract

Workplace accidents are an important economic phenomenon. Yet, the pro-cyclical fluctuations in workplace accidents are not well understood. They could be related to fluctuations in effort and working hours, but workplace accidents may also be affected by reporting behavior. Our paper uses unique data on workplace accidents from an Austrian matched worker-firm dataset to study in detail how economic incentives affect workplace accidents. We find that workers who reported an accident in a particular period of time are more likely to be fired later on. And, we find support for the idea that recessions influence the reporting of moderate workplace accidents: if workers think the probability of dismissals at the firm level is high, they are less likely to report a moderate workplace accident.

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

“…In addition to its contributions to the CWD and workplace accident literature (Seabury et al., ; Braakmann, ; Boone et al., ; Bronchetti and McInerney, , ; Levine et al., ; Sullivan and To, ; Sojourner and Yang, ; Hansen, ; Johnson, ; Seabury and Powell, ), this article also contributes to the literatures on beauty and the labor market (Hamermesh and Biddle, , ; Biddle and Hamermesh, ), discrimination (Anwar and Fang, , ; Fang and Norman, ), and the obesity–wage gap (Cawley, ; Lindeboom et al., ; Harris, ; Caliendo and Gehrsitz, ). We find that the well‐documented obesity–wage penalty only exists in high risk jobs.…”

“…Finally, we also include regional controls for economic conditions that may affect the value of the worker's marginal product (Bender and Mridha, ; Boone et al., ). This includes the local unemployment rate (⩽6%, 6% to 8.9%, >9%) as well as the region of residence in the United States (northeast, north central, west, and south; urban or rural residence).…”

Work inspections as a control mechanism for mitigating work accidents in Europe

“…This section deals with the analysis of the theoretical connection between economic activity and the rate of work accidents. Echoing the seminal work by Kossoris (1938), scholars have devoted significant efforts on evaluating the relationship between macroeconomic figures, often linked to GDP levels, and work accident rates (e.g., Lanoie, 1992, Davies et al, 2009, Svensson, 2010, Asfaw et al, 2011, Boone et al, 2011, Song et al, 2011. Within this literature, a common presumption is that the state of the economic cycle (expansion or recession) affects the exploitation of production factors, especially employment, and, therefore, the state of the economy is a significant variable explaining variations in work accident rates across territories and across time.…”

“…On the other hand, prior research has documented a notification effect associated to the greater reporting of accidents by workers (Gerdtham andRuhm, 2006, Davies et al, 2009). It has been argued that, in periods of economic growth, the relatively lower cost of finding a job in the market gives workers incentives to report all minor work accidents (e.g., Boone and van Ours, 2006, Boone et al, 2011, Fernández-Muñíz et al, 2018.…”

“…Similar to economic outputs linked to positive externalities (e.g., Caselli andColeman, 2006, Lafuente et al, 2019), it is unquestionable that work safety is a desired aspect to policy makers interested in minimizing one of the most significant negative externalities of economic activity, namely work accidents (e.g., Arrow et al, 1996, Boone et al, 2011.…”