New Study: OSHA Inspections Lower Workers Compensation Costs

[tweetmeme] A new study says it confirms that OSHA’s inspections not only prevent workers from getting hurt on the job, they also save billions of dollars for employers through reduced workers’ compensation costs. The study by business school economists at the University of California and Harvard University, analyzed how workplace safety inspections affected injury rates and other outcomes. In a comparison of 409 randomly inspected establishments in California with 409 matched-control establishments that were eligible, but not chosen, for inspection the study found no evidence that the inspection process and subsequent corrective actions came at the expense of employment, sales, credit ratings, or the firm’s survival.

Key Findings from the Study

  • 9.4% drop in injury claims at workplaces in the four years following an inspection
  • 26% average savings on workers’ compensation costs compared to similar, non-inspected companies
  • $355,000 average savings for an employer (small or large) as a result of an OSHA inspection
  • $6 billion estimated savings to employers nationwide

As researchers David Levine, Michael Toffel, and Matthew Johnson explain, “The benefits of a randomized safety inspection appear to be substantial.  These results do not support the hypothesis that OSHA regulations and inspections on average have little value in improving health and safety.” Furthermore, the researchers found “no evidence that these improvements came at the expense of employment, sales, credit ratings, or firm survival.”

Dr. David Michaels responded strongly to the study,  “I have been promoting that message since I became head of the Occupational Safety and Health Administration almost three years ago. It is supported by empirical evidence—and now—it’s been confirmed by a peer-reviewed study published in Science, one of the world’s top scientific journals. Not only that, the new study, conducted by professors at the University of California and Harvard Business School, shows that OSHA inspections save billions of dollars for employers through reduced workers compensation costs.”  OSHA’s full response to the study.

Read the entire study here.  “Randomized Government Safety Inspections Reduce Worker Injuries with No Detectable Job Loss,”