"Direct and Indirect Effects of Regulation: A New Look at OSHA's Impact"
Journal of Law and Economics,
Volume: 28 | Issue: 1 | Pages: 1-25
Publication type: Journal article
Research Archive Topic: Business Economics and Public Policy
An extended series of economic studies has failed to find any statistically significant impact on national injury rates due to the OSHA. Two distinct explanations for this apparent failure of OSHA have been put forward in these studies. For the purposes of this study, the first of these explanations will be called the "noncompliance hypothesis" and the second will be labeled the "inefficiency hypothesis." The first of these hypotheses leads immediately to two dilemmas, which can only be resolved by expanding the range of issues considered in an analysis of OSHA. In practice, data limitations prevent actual examination of compliance costs. The existence and magnitude of indirect effects, however, may be inferred from asymmetries of compliance and enforcement, as explained in the paper. Addressing these issues, this study develops and tests a three-equation model of workplace inijuries, corporate noncompliance with OSHA standards, and OSHA enforcement.
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