Randomized Government Safety Inspections Reduce Worker Injuries With No Detectable Job Loss
Key Insights for Managers
Do health and safety regulatory inspections improve workplaces by making them safer or worsen them by making them less competitive? This study, by David Levine, Michael Toffel, and Matthew Johnson, compares more than 400 single-plant firms in California that were randomly inspected by the state’s Division of Occupational Safety and Health (Cal/OSHA) to a matched set of firms that were not inspected. Those that were inspected became safer, as their number of injuries and injury-related costs each declined. Each inspection is estimated to reduce medical costs and lost earnings by roughly $355,000 (in 2011 dollars) over the subsequent five years.
There is no evidence that inspections weakened firm’s economic viability through increased compliance costs. Specifically, there were no significant differences between uninspected and inspected firms’ subsequent sales, credit ratings, or employment levels.