Examining Regulatory Devolution from the Ground Up: a Comparison of State and Federal Enforcement of Construction Safety Regulations

Abstract:     
Although the issue of regulatory devolution has received much scholarly scrutiny, rigorous empirical studies of its effects on important policy outcomes are scarce. This paper explores the effects of partial regulatory devolution in the occupational safety arena by exploiting a unique historical anomaly whereby some states enforce protective labor regulations that are enforced elsewhere by the federal Occupational Safety and Health Administration. Analyzing data from the construction industry, this article contains several important findings. State inspectors, although using more cooperative enforcement techniques, appear to use traditional enforcement tools more sparingly than their federal counterparts, typically imposing lower fines per violation and having less measurable impact on inspected firms' regulatory compliance. Surprisingly, however, although the estimated frequency of non-fatal construction injuries is approximately ten percent higher in the presence of state enforcement, the estimated frequency of fatal injuries is fifteen percent lower. I suggest that although higher underreporting of non-fatal injuries by companies in state-plan states could explain this puzzling finding, it is also possible that different regulatory styles have different "comparative advantages" in deterring nonfatal injuries on one hand and occupational fatalities on the other.

JEL Classifications: D73, D78, H73, J28, K00, K23, K31, K32, L51, L74

Working Paper Series