Problems of market adjustments to occupational safety and health hazards

This paper analyses problems of labor market adjustments to occupational safety and health (OSH) hazards. It also presents analytical models for the eventual measurement and empirical analyses of factors effecting the level of OSH hazards in the workplace. This study does not pretend to deal with the regulatory problem in occupational terms. It nevertheless raises conceptual issues that may be relevant for regulatory strategy. Section I contains a statement of the problem and an outline of the analysis. Section II discusses the concept of appropriate levels of OSH. Section II studies the role of the market: wage differentials that compensate for OSH hazards ; some characteristics of market allocations of wages and safety such as efficiency and distribution. Section IV studies market imperfections: market adjustments with imperfect information about OSH and about firms' actions regarding OSH; the quasi public good aspects of OSH; institutional rigidities such as lack of perfect mobility of workers; OSH externalities such as spillover effects of OSH on the families of workers, the community near the workplace and society as a whole; and also externalities in the production of OSH and of OSH information. Section V studies the role of the government; its objectives and instruments of OSH policies. Section VI discusses the role of labor unions. The results suggest that there is no standard 'correct policy' for OSH but a variety of policies are required.