Demand Conditions and Worker Safety: Evidence from Price Shocks in Mining / Kerwin Kofi Charles, Matthew S. Johnson, Melvin Stephens Jr., Do Q. Lee.

Format:

Book

Author/Creator:

Charles, Kerwin Kofi.

Contributor:

National Bureau of Economic Research.

Johnson, Matthew S.

Stephens, Melvin, Jr.

Lee, Do Q.

Series:

Working Paper Series (National Bureau of Economic Research) no. w26401.

NBER working paper series no. w26401

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Demand Conditions and Worker Safety

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2019.

Summary:

We investigate how demand conditions affect employers' provision of safety - something about which theory is ambivalent. Positive demand shocks relax financial constraints that limit safety investment, but simultaneously raise the opportunity cost of increasing safety rather than production. We study the U.S. metals mining sector, leveraging exogenous demand shocks from short-term variation in global commodity prices. We find that positive price shocks substantially increase workplace injury rates and safety regulation non-compliance. While these results indicate the general dominance of the opportunity cost effect, shocks that only increase mines' cash-flow lower injury rates, illustrating that financial constraints also affect safety.

Notes:

Print version record

October 2019.