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How regulations undervalue occupational fatalities
Regulation & Governance  (IF5.4),  Pub Date : 2021-11-15, DOI: 10.1111/rego.12445
W. Kip Viscusi, Robert J. Cramer

The U.S. Occupational Safety and Health Administration establishes incentives for safety by setting and enforcing regulatory standards. Using four and a half decades of inspection data, this article provides a comprehensive analysis of the factors underpinning penalties following fatalities. The “fatality premium” for regulatory violations following a worker death is quite modest and is several orders of magnitude below the value-of-a-statistical-life figure needed to establish efficient levels of deterrence in the absence of all other financial incentives. Although there are low statutory caps on penalties, only 8% of the penalties for violations involving fatalities are constrained by the cap, suggesting that current statutes establish norms for reasonable penalty amounts. In situations involving a fatality at firms with union representation during the inspection, the enforcement sanctions are more stringent. Fatalities involving migrant laborers are less heavily penalized.