Does unemployment affect compensating wage differentials for work-related fatal injuries? Empirical evidence from occupational data

Abstract

The study examines the hypothesis that high unemployment rates in local labour markets weaken the bargaining power of workers and reduce the wage premium given to compensate for the risk of death in the workplace. Analysis of fatal occupational injury risk and demographic data from the Bureau of Labour Statistics (BLS) and the Current population Survey (CPS) over 2004 to 2007 finds strong evidence for this hypothesis. Results show that both blue-collar union and nonunion workers are likely to receive a lower wage premium in locations where unemployment rates are high. They also indicate that the compensating differentials for fatal injury risks are larger for union workers than those of their nonunion counterparts.