Does the Value of a Statistical Life Vary with Union: Evidence from Tunisian Data

Abstract

This paper measures the value of a statistical life for union and nonunion workers. To avoid the problem of a selectivity biais arising if richer people choose safer jobs, we consider risk as an endogenous variable. The endogeneity of job risk implies that ordinary least squares estimates of the wage equation may be biased and this should be corrected. Accordingly, we use instrumental variables techniques. Using original data from “la Caisse nationale de la securite sociale”, we found that organizing workers in union generates a value of statistical life at least two times higher than for non-union workers (344,595.2 dinars for non-union and 985,459.7 dinars for union workers). In addition, we found evidence of wage differentials for hazardous work. However, these values of statistical life are much lower than those estimated in developed countries. This study could provide useful results for policymakers to reduce the risk of death in Tunisia.