The Effect of Government Safety Enforcement on Workers: Evidence from Linked Employer-Employee Data

Grant description:

Johnson and Levine seek to understand how enforcement of government safety regulations affects workers’ wages and how the effect differs across groups of workers based on income, race, and ethnicity in the United States. While prior work focused on whether inspections lower subsequent workplace injuries and affect overall establishment payroll, scholars don’t know much, if anything, about the impact of inspections on individual workers’ wages. If regulatory enforcement lowers wages at the same time it improves health and safety, then the overall effects on worker well-being may be mixed. The two researchers will utilize the randomness of inspections by the U.S. Occupational Safety and Health Administration. This setting offers a unique opportunity to evaluate the effects of inspections as if examining a randomized controlled trial. Johnson and Levine plan to compare the trajectories of establishments (and workers at those establishments) randomly selected for inspection to those eligible but not selected for inspection. Inspection data will be linked to the Longitudinal Employer-Household Dynamics data series. In addition to yielding new evidence about the impact of safety and health regulatory enforcement on workers’ wages, this work also has the potential to contribute to the current literature on monopsony power in labor markets by investigating whether the effect of inspections on wages varies by local labor market concentration.