The economic cost of fatal workplace accidents in Sweden - A methodology for long-term decision analysis.

Abstract

The few studies attempting to estimate costs of fatal accidents at workplaces suffer from poor or obscure applied methodologies. As the costs are often limited for the exposed company/industry in the short run, economic decisions about investments to improve the safety and security of workplaces are moreover not made at the societal level nor within an appropriate time frame. In a social economic decision, the total potential productivity lost over time due to a fatal accident is considered regardless of who pays what compensation to the families involved. This study introduces a methodology appropriate for making long-term economic decisions at the societal level to prevent accidents in Swedish workplaces. The introduced methodology, which is based on the human capital approach, is used to assess potential productivity losses associated with the accidents. The empirical findings show that, over the period 2008-2019, Swedish society could have gained more than 8.5 billion Swedish crowns by preventing accidents at Swedish workplaces. The objective achieved as the economic cost of fatal workplace accidents assessed from a long-term societal perspective. Effective preventive measures in the workplace make thus an incredible contribution to society in the form of increased national income, sustainable welfare and economic development.