The Economics of Health and Safety at Work: An Interdiciplinary Review of the Theory and Policy

42 Pages Posted: 8 Jan 2013

See all articles by Konstantinos Pouliakas

Konstantinos Pouliakas

affiliation not provided to SSRN

Ioannis Theodossiou

University of Aberdeen - Business School

Date Written: February 2013

Abstract

This paper engages in an interdisciplinary survey of the current state of knowledge related to the theory, determinants and consequences of occupational safety and health (OSH). It first describes the fundamental theoretical construct of compensating wage differentials, which is used by economists to understand the optimal provision of OSH in a perfectly competitive labour market. The plethora of incentives faced by workers and firms in job and insurance markets that determine the ultimate level of OSH are discussed in detail. The extensive empirical evidence from the hedonic wage and stated choice approaches used to assess the value of OSH is reviewed. The causes of inefficiency and inequity in the market for OSH, such as externalities, moral hazard in compensation insurance, systematic biases in individual risk perception/well‐being and labour market segregation are subsequently examined. The implications of government intervention and regulation for tackling the aforementioned inefficiencies in OSH are then considered. Finally, the survey identifies areas of future research interests and suggests indicators and priorities for policy initiatives that can improve the health and safety of workers in modern job markets.

Keywords: Absenteeism, Accidents, Health, Illnesses, Regulation, Safety

Suggested Citation

Pouliakas, Konstantinos and Theodossiou, Ioannis, The Economics of Health and Safety at Work: An Interdiciplinary Review of the Theory and Policy (February 2013). Journal of Economic Surveys, Vol. 27, Issue 1, pp. 167-208, 2013, Available at SSRN: https://ssrn.com/abstract=2197636 or http://dx.doi.org/10.1111/j.1467-6419.2011.00699.x

Konstantinos Pouliakas (Contact Author)

affiliation not provided to SSRN

No Address Available

Ioannis Theodossiou

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

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