OSHA Inspections Reduce Worker Injuries

It’s Official: OSHA Doesn’t Kill Jobs. It Stops Jobs from Killing Workers

Key findings of the study on OSHA inspections

  • 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

A landmark new study by business school economists at the University of California and Harvard University 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, entitled “Randomized Government Safety Inspections Reduce Worker Injuries with No Detectable Job Loss,” appeared in the top scientific journal Science and reports that workplace injury claims dropped 9.4% at businesses in the four years following a randomized OSHA inspection, compared with employers who were not inspected. Those same employers also saved an average of 26% on workers’ compensation costs, compared to similar companies who were not inspected. This means that the average employer saved $355,000 (in 2011 dollars) as a result of an OSHA inspection. Benefits were observed among both small and large employers. Nationwide, these savings to employers amount to an estimated six billion dollars.
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.”
Following an interview with study co-author and assistant professor Michael Toffel, Michael Blanding of the Harvard Business School newsletter described the enormity of the findings:

[T]hose who charge that OSHA regulations cost business money have it completely wrong. In fact, the regulations save money. The magnitude of the results surprised even Toffel and Levine, who expected perhaps a small savings if any. But the strength of the findings, they say, should persuade even skeptical antiregulatory critics.

On May 21, Assistant Secretary for OSHA David Michaels responded to the new findings in an entry on the Department of Labor blog, writing:

The fact is OSHA inspections save lives and jobs at the same time. This is not a surprise to me. I regularly hear from employers, both large and small, that they value OSHA inspections and treat the inspector as an additional, expert set of eyes. The findings should finally put an end to the criticisms that OSHA inspections make running a business more expensive without adding value. The results are in: OSHA saves lives and jobs!

Dr. Michaels’ full response to the study is available on the Department of Labor blog. A summary of the findings also appears in a ScienceNow breaking report, and subscribers to the journal can access the study at www.sciencemag.org. For more information about what OSHA is doing to protect workers, visit www.osha.gov.

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Written by CCAR