Economics

OSHA enforcement and workplace injuries: A behavioral approach to risk assessment

Document Type

Article

Abstract

We develop a model of risk assessment that incorporates assumptions from the behavioral theory of the firm into conventional expected utility models of compliance, and test the model using data on injuries and OSHA inspections for 6842 manufacturing plants between 1979 and 1985. Four hypotheses are supported-the specific deterrence effect of an inspection, the importance of lagged effects of general deterrence, the asymmetrical effects of probability and amount of penalty on injuries, and the tendency of injury rates to self-correct over a few years. The model estimates that a 10% increase in enforcement activities will reduce injuries by about 1% for large, frequently inspected firms. Prior analyses reporting lower impacts (Smith, 1979; Viscusi, 1986a) are replicated to distinguish between sampling and modeling differences. The results suggest that further compliance theory needs more detailed models of risk-assessment processes to be tested on samples of firms most affected by enforcement. © 1990 Kluwer Academic Publishers.

Publication Title

Journal of Risk and Uncertainty

Publication Date

9-1990

Volume

3

Issue

3

First Page

283

Last Page

305

ISSN

0895-5646

DOI

10.1007/BF00116786

Keywords

deterrence, enforcement, OSHA, regulation, safety

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