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

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 empirical evidence on the magnitude of the VSL arises from hedonic wage models that have been plagued by measurement error and omitted variables. To address these limitations, this paper employs randomly assigned workplace safety inspections to instrument for plant-level risks in a quasi-experimental design. We provide credible causal evidence for the existence of compensating wages for fatality risks and estimate a VSL between $(2016)8 million and $(2016)10 million. (JEL J17, J28, J31, K32)