Abstract
The rise of the Industrial Revolution is often depicted as a cause of hazardous working conditions and is skillfully epitomized in William Blake's tale of a child chimney sweeper. Conventional wisdom puts firm profit in conflict with occupational safety. We reexamine this argument noting that injuries are very costly to firms because they lead to higher wage premiums, worker compensation, and costly work stoppages. We hypothesize that it is precisely for these reasons that firms in the industries with dangerous working conditions have the strongest incentives to innovate and substitute more capital for labor. Using a longitudinal panel of U.S. industries, we test and confirm our hypothesis that higher injury rates lead to higher capital stock per worker, over time. Moreover, our estimates suggest that firms provide more capital and equipment per worker than what would have been there based solely on the compensating wage differential.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
