TY - JOUR
T1 - Differentiating occupational illness and injury
T2 - The private costs and economic incentives
AU - Strand, Stephen H.
AU - Johnson, William G.
N1 - Funding Information:
Ackflowludyements-Thism aterial is based on research supported by the National Science Foundation under Grant No. APR077-04084A. ny opinions,f indingsa nd conclusions or recommendationes xpressedin this paper are those of the authors and do not necessarilyr eflect the views of the National ScienceF oundation.A n initial version of this paper was presenteda t the 105thM eeting of the American Public Health Association in Washington, D.C., on November I, 1977.T he authors would like to thank Wayne Brooks and anonymousr efereesf or helpful comments.A ny remaininge rrors are the responsibilityo f the authors.
PY - 1980/12
Y1 - 1980/12
N2 - The private incentives to supply occupational safety and health activities result from the expected costs of workplace injury and illness. Expected costs in turn depend on both the probability of occurrence and the magnitude of illness and injury costs when they occur. The probability of illness and injury are difficult to specify, but for different reasons. Occupational illness results from prolonged exposure to a hazard or hazards over time, while the causes of injury-producing accidents at a point in time are not well understood. Similarly, difficulty exists in making a priori estimates of illness and injury costs to workers, since both impairment and disability are related to personal characteristics and preferences. In addition, non-human capital costs, such as damage to plant and equipment, are often associated with the occurrence of accidents. While this paper analyzes expected illness and injury costs in detail, emphasis is also given to differences in cost distribution since the private incentive to undertake prevention activity is related to the costs borne by each economic agent. Damage costs to non-human capital, for example, are often borne completely by the firm, while worker injury and illness costs are distributed among the worker, the firm, and society. Depending on the production process, therefore, incentives for the firm to undertake injury prevention activities may exist even in the absence of risk-related wage differentials. Since the strength of private incentives are a central concern in the efficient allocation of resources by occupational safety and health agencies, the policy implications of the analysis for workplace regulation are presented in the conclusion.
AB - The private incentives to supply occupational safety and health activities result from the expected costs of workplace injury and illness. Expected costs in turn depend on both the probability of occurrence and the magnitude of illness and injury costs when they occur. The probability of illness and injury are difficult to specify, but for different reasons. Occupational illness results from prolonged exposure to a hazard or hazards over time, while the causes of injury-producing accidents at a point in time are not well understood. Similarly, difficulty exists in making a priori estimates of illness and injury costs to workers, since both impairment and disability are related to personal characteristics and preferences. In addition, non-human capital costs, such as damage to plant and equipment, are often associated with the occurrence of accidents. While this paper analyzes expected illness and injury costs in detail, emphasis is also given to differences in cost distribution since the private incentive to undertake prevention activity is related to the costs borne by each economic agent. Damage costs to non-human capital, for example, are often borne completely by the firm, while worker injury and illness costs are distributed among the worker, the firm, and society. Depending on the production process, therefore, incentives for the firm to undertake injury prevention activities may exist even in the absence of risk-related wage differentials. Since the strength of private incentives are a central concern in the efficient allocation of resources by occupational safety and health agencies, the policy implications of the analysis for workplace regulation are presented in the conclusion.
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U2 - 10.1016/0160-7995(80)90013-1
DO - 10.1016/0160-7995(80)90013-1
M3 - Article
C2 - 7466426
AN - SCOPUS:0019123876
SN - 0160-7995
VL - 14
SP - 259
EP - 266
JO - Social Science and Medicine - Part C Medical Economics
JF - Social Science and Medicine - Part C Medical Economics
IS - 4
ER -