Randomized Safety Inspections and Risk Exposure on the Job: Quasi-experimental Estimates of the Value of a Statistical Life


CEnREP Working Paper No. 17-016
May 2017

Abstract:

The value of a statistical life (VSL) is a critical driver of estimated benefits for federal policies designed to improve human health, safety, and environmental exposures. The vast majority of empiri-cal evidence on the magnitude of the VSL arises from hedonic wage models that have been plagued by measurement error and omitted variables. This paper employs randomly assigned workplace safety inspections to instrument for plant-level risks in a quasi-experimental design to address these limitations. We provide credi-ble causal evidence for the existence of compensating wages for fa-tality risks and estimate a VSL between $8 and $10 million ($2016).

Suggested citation: Lee, J. M. and L. O. Taylor (2017). Randomized Safety Inspections and Risk Exposure on the Job: Quasi-Experimental Estimates of the Value of a Statistical Life. (CEnREP Working Paper No. 17-016). Raleigh, NC: Center for Environmental and Resource Economic Policy.
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