Working Paper: NBER ID: w1366
Authors: Casey Ichniowski
Abstract: This study documents a strong inverse relationship between accident rates and production in a sample of eleven firms in the same narrowly defined industry classification. Given the detailed set of input controls and controls for plant-specific and time-specific factors used in the analysis, the study argues that a theoretical framework that describes firms as operating on well-defined production frontiers is not adequate for providing an entirely accurate interpretation of the basic empirical finding.Three elaborations to the basic production frontier framework are developed and used to interpret the accident-productivity relationship.
Keywords: Safety Expenditures; Productivity; Accident Rates; Production Efficiency
JEL Codes: J28; L25; O32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher accident rates (R41) | Lower production levels (E23) |
| Higher accident rates (R41) | Lower production efficiency (D24) |
| Higher accident rates (R41) | Persistent inefficiency in production processes (D24) |
| Higher accident rates (R41) | Lower production within plants (D24) |
| Cross-plant accident rate (J28) | Lower production (D24) |