A study addressing regulation and investment in safety and health

The link below is to a study conducted by Sidney A. Shapiro with the University of Kansas Law School addressing regulation and investment in safety and health. The BOSC is aware that certain aspects of the paper could be viewed as controversial by some SH&E professionals due its content. However, the BoSC believes it is important to raise awareness of these issues and it does go into great deal in comparing the cost of investing in safety to the motivation to pursue compliance.

The published abstract is:

An employer will invest in safety and health precautions until the cost is more than the expense of paying higher wages, worker's compensation and other accident and illness costs. Employees received additional protection because governments have chosen to augment these financial incentives with regulation. Studies indicate that all three approaches cause employers to invest in health and safety precautions, but the extent to which injuries and illnesses are reduced is difficult to verify and may be limited in numerous work situations. The literature has identified potential reforms, but the viability of key reforms is uncertain. Thus, labor markets, compensation and regulation are highly imperfect alternatives concerning the reduction of occupational accidents and illnesses. As a result, continued reliance on all three approaches is indicated.

JEL Classification: K31, K32

Keywords: Occupational Safety, Occupational Health, Occupational Risk, Workers' Compensation