Occupational safety in a frictional labor market

Martin Kerndler

No 02/2022, ECON WPS - Working Papers in Economic Theory and Policy from TU Wien, Institute of Statistics and Mathematical Methods in Economics, Economics Research Unit

Abstract: This paper studies the provision of occupational safety when the labor market is subject to search frictions. While safety measures are costly for firms, they reduce workers' mortality. We show that the presence of search frictions decreases the socially optimal level of occupational safety relative to a frictionless labor market, leading to excess mortality. In a decentralized setting where wages and safety measures are bargained at the firm level, matching externalities and a labor supply externality may further reduce safety provision. We obtain conditions under which these externalities are internalized by firms and workers, and discuss the role of policy for promoting occupational safety. Calibrating the model to the US, we find that search frictions explain 8%-14% of the work-related mortality rate, which indirectly makes them the third largest cause of work-related death.

Keywords: occupational safety; mortality; search frictions; Nash bargaining (search for similar items in EconPapers)
JEL-codes: J17 J28 J32 J38 J64 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-dge, nep-hea and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/251470/1/econ-wp02-2022.pdf (application/pdf)

Related works:
Journal Article: Occupational safety in a frictional labor market (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuweco:022022

Access Statistics for this paper

More papers in ECON WPS - Working Papers in Economic Theory and Policy from TU Wien, Institute of Statistics and Mathematical Methods in Economics, Economics Research Unit Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().