Occupational Safety and Health

Abstract

An employer will invest in safety and health precautions until the cost is more than the expense of paying higher wages, workers' compensation, and other accident and illness costs. Employees receive 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.