Safety in the workplace has long been a subject of interest for economists. Much of this attention has focused on the presence of risks on the job and the tendency of workers (and others) to underestimate these risks. Adam Smith [16, 96-7] notes this optimism and, as George Stigler [19] points out, Jevons felt that workplace hazards were ignored by those most directly concerned. This lack of faith in the market to provide adequate safety (or to compensate those who face such risks) is evident in the law regulating the workplace primarily Workers' Compensation (WC) and the Occupational Safety and Health Act (OSHA). These policies are-in the judgment of many modern economists--justified by the misperception of risks [5; 12; 13]. However, other economists have argued that despite their intentions, such laws may not have one of the primary effects they are directed to accomplish: the reduction of workplace accidents.' Relatively little research has been devoted to another aspect of safety regulation its cost -perhaps because these costs are thought to be very small.2 It is on this issue that this paper focuses; what is the impact of workplace regulation on firm decision making? To accomplish this, a model is developed in section II which examines the impact on a firm's factor choices attributable to the imposition of workplace safety regulation. The theory examines WC and OSHA, both singly and jointly, and their effects on the level of and changes in relative factor usage. These considerations form the bulk of section III. This model yields some interesting conclusions about the effects of regulation in the workplace. The primary implication of the theory is that all increases in safety are paid for through lowered output and factor employment. Moreover, this result holds true whether the additional safety is the product of direct safety regulation (OSHA) or through indirect forms of regulation (like WC). These results are possibly more striking given the findings of empirical work done on the impact of WC and OSHA on safety. This body of research has, to