WORKER INVESTMENTS IN SAFETY, WORKPLACE ACCIDENTS, AND COMPENSATING WAGE DIFFERENTIALS

2018 ◽  
Vol 60 (1) ◽  
pp. 133-155 ◽  
Author(s):  
José R. Guardado ◽  
Nicolas R. Ziebarth
Keyword(s):  
Wage Differentials ◽  
Compensating Wage Differentials ◽  
Workplace Accidents

Workers' Compensation, Job Hazards, and Wages

ILR Review ◽  
1983 ◽  
Vol 36 (4) ◽  
pp. 642-654 ◽  
Author(s):  
Stuart Dorsey ◽  
Norman Walzer
Keyword(s):  
Wage Differentials ◽  
Workers Compensation ◽  
Compensating Wage Differentials ◽  
Paper Test ◽  
Risk Premiums ◽  
Wage Premiums ◽  
Downward Bias ◽  
Employer Liability ◽  
Wage Risk ◽  
Nonfatal Injury

Competitive theory implies that compensating wage differentials will be paid to workers in hazardous employment, but only to the extent that employees are liable for risk. This prediction suggests that previous estimates of wage-risk premiums may be biased as a result of the failure to control for variations in workers' compensation benefits across states. The authors of this paper test an empirical model of compensating wage differentials that includes a measure of employer liability. For nonunion workers, they find that significant wage premiums are paid for an increased probability or severity of nonfatal injury; a slight downward bias in these estimates results from omitting the liability variable; and increases in employers' costs of workers' compensation are offset dollar-for-dollar by reduced wages. For union workers, however, the evidence on compensating differentials is mixed, and there is no suggestion of a trade-off between wages and the costs of workers' compensation.

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