The Impact of Workplace Conditions on Firm Performance

Ioan Sebastian Buhai, Elena Cottini () and Niels Westergård-Nielsen
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Elena Cottini: University of Aarhus, and Cath. University Milan
Niels Westergård-Nielsen: University of Aarhus

No 08-077/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This paper estimates the impact of work environment health and safety practice on firm performance, and examines which firm-characteristic factors are associated with good work conditions. We use Danish longitudinal register matched employer-employee data, merged with firm business accounts and detailed cross-sectional survey data on workplace conditions. This enables us to address typical econometric problems such as omitted variables bias or endogeneity in estimating i) standard production functions augmented with work environment indicators and aggregate employee characteristics and ii) firm mean wage regressions on the same explanatory variables. Our findings suggest that improvement in some of the physical dimensions of the work health and safety environment (specifically, “internal climate” and “repetitive and strenuous activity”) strongly impacts the firm productivity, whereas “internal climate” problems are the only workplace hazards compensated for by higher mean wages.

Keywords: occupational health and safety; work environment; production function estimation; firm performance; compensating wage differentials (search for similar items in EconPapers)
JEL-codes: J28 J31 L23 (search for similar items in EconPapers)
Date: 2008-08-28
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Citations: View citations in EconPapers (11)

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Related works:
Working Paper: The impact of workplace conditions on firm performance (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20080077

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