The Friedman Blog

Posted on 08/03/2012, by Jeremy Edsall

Study Finds OSHA Inspections Save Lives, Cuts Costs

A study entitled  “Randomized Government Safety Inspections Reduce Worker Injuries with no Detectable Job Loss,”  was recently published in Science, one of the world’s top scientific journals. Conducted by professors at the University of California and Harvard Business School, it concluded that OSHA inspections save billions of dollars for employers through reduced workers compensation costs.

Study findings were that as a result of previous OSHA inspections, workplace injuries were reduced in following years. Among the documented evidence was; workplace injury claims dropping 9.4% at randomly chosen businesses in the four years following an inspection by the California OSHA program, compared with employers not inspected. Those same employers also saved an average of 26% on workers’ compensation costs, when compared with similar firms that were not inspected. This means that the average employer saved $355,000 (in 2011 dollars) as a result of an OSHA inspection. The effects were seen among small and large employers.

OSHA inspections prevent thousands of workplace injuries across the nation each year, while saving employers money and protecting jobs. Michael Toffel, Associate Professor of Business Administration at the Harvard Business School, estimates that OSHA inspections nationwide could save employers $6 billion. And this doesn’t count the costs of lost production when workers are injured or made sick by their jobs or the pain and suffering of employees that is not compensated. 

Important Conclusions from the Study:

* Employees gain from the OSHA inspection process. There was no evidence that inspections lead to worse outcomes for employees or employers in terms of employment or company survival.

* The hypothesis that OSHA regulations and inspections on average have little value in improving health and safety is clearly incorrect and the benefits of a randomized safety inspection appear to be substantial.


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