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New study shows that workplace inspections save lives, don't destroy jobs
Date:5/21/2012

Research to be published in Science on May 18, 2012, sheds light on a hot-button political issue: the role and effectiveness of government regulation. Does it kill jobs or protect the public?

The new study, co-authored by Harvard Business School Professor Michael Toffel, Professor David Levine of the Haas School of Business at the University of California, Berkeley, and Boston University doctoral student Matthew Johnson, examines workplace safety inspections conducted by California's Division of Occupational Safety and Health (Cal/OSHA). The authors carried out the first evaluation of a "clinical trial" of the state's mandated randomized inspections to discern their effect on both worker safety and companies' bottom lines.

The results overturn conventional wisdom: Workplace inspections do reduce on-the-job injuries and their associated costs, and the researchers could not detect any harm to companies' performance or profits.

"The randomized inspections provided a perfect natural experiment that uses the power of randomization just like a medical clinical trial," Toffel said. "Because Cal/OSHA typically inspects facilities following complaints or recent accidents, you can't study those inspections to get an unbiased understanding of whether they make a difference. By studying the inspections Cal/OSHA conducted at workplaces selected at random, we were able to overcome this problem to learn the actual impact of inspections."

The study found that within high-hazard industries in California, inspected workplaces reduced their injury claims by 9.4 percent and saved 26 percent on workers' compensation costs in the four years following the inspection, compared to a similar set of uninspected workplaces. On average, inspected firms saved an estimated $355,000 in injury claims and compensation for paid lost work over that period. What's more, there was no discernible impact on the companies' profits.

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Contact: Jim Aisner
jaisner@hbs.edu
617-495-6157
Harvard Business School
Source:Eurekalert

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