Agency Structure and Firm Culture: OSHA, EPA, and the Steel Industry

Abstract

We compare models of Occupational Safety and Health Administration (OSHA) and Environmental Protection Agency (EPA) enforcement and compliance for steel plants during the 1980s. We find that OSHA and EPA respond similarly to plant-level compliance and measures of hazardousness, but differently to firm-level compliance and risks of plant closing, and we relate the differences to the agencies' differing organizational structures. Plant-level compliance is affected by enforcement pressure, compliance costs, and the firm's overall compliance behavior in similar ways for the two regulatory areas, but environmental compliance was also sensitive to plant size and risk of closing. Finally, we find that the likelihood that a plant was in compliance with one agency seemed at most weakly related to whether it was in compliance with the other, but that plants likely to receive enforcement attention from one agency were also more likely to receive enforcement attention from the other agency.