Have Government Regulations Improved Workplace Safety? A Test of the Asynchronous Regulatory Effects in China's Coal Industry, 1995-2006

Abstract

Problem: Empirical studies on the effectiveness of workplace safety regulations are inconclusive. This study hypothesizes that the asynchronous effects of safety regulations occur as regulation needs time to become effective. Safety regulations will work first by reducing the most serious accidents but improve overall safety performance later. Method: The hypothesis is tested by studying a provincial level aggregate panel dataset for China’s coal industry using two different models with different sets of dependent variables: a fixed-effects model, on mortality rate, which if defined as fatalities per 1,000 employees, and a Negative Binominal model on the annual number (frequency) of disastrous accidents. Results: Safety regulations can reduce the frequency of disastrous accidents, but have not reduced mortality rate, which represents overall safety performance. Discussion and Summary: Policy recommendations are made, including shifting production from small to large mines through industrial consolidation, improving the safety performance of large mines, addressing consequences of decentralization and facilitating the implementation of regulations through carrying on institutional actions and supporting legislation.

Keywords: asynchronous effects, safety regulations, mining safety, coal, China

JEL Classification: C33, K42, L51, L72, P37