Working Paper: NBER ID: w21129
Authors: Gautam Gowrisankaran; Charles He; Eric A. Lutz; Jefferey L. Burgess
Abstract: Underground coal mining is a dangerous industry where the regulatory state may impose tradeoffs between productivity and safety. We recover the marginal tradeoffs using disasters near a mine as shocks that increase future accident costs. We find that in the second year after a disaster, productivity decreases 11% and accident rates decrease 18-80% for mines in the same state, with some evidence that the number of managers increases. Using published “value of statistical life” and injury cost estimates, we find that the productivity loss following a disaster in the same state costs 2.51 times the value of the safety increases.
Keywords: Productivity; Safety; Regulation; Coal Mining; Disasters
JEL Codes: D24; I18; J28; L72
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Mine disaster (L72) | Productivity (O49) |
| Mine disaster (L72) | Accident rates (R41) |
| Mine disaster (L72) | Number of managers (M54) |
| Mine disaster (L72) | Fatalities (I12) |
| Mine disaster (L72) | Regulatory scrutiny (G18) |
| Mine disaster (L72) | Severe accidents (J28) |