A new study indicates that workplace inspections save lives, reduce workers’ compensation claims, and do not cost jobs.
Research published in Science magazine in May sheds light on a hot-button political issue: the role and effectiveness of government regulation. In this study, the issue was the impact of government safety inspections.
The study, entitled "Randomized Government Safety Inspections Reduce Worker Injuries with No Detectable Job Loss," was co-authored by Harvard Business School Professor Michael Toffel, Professor David Levine of the Haas School of Business at the University of California, Berkeley, and doctoral student Matthew Johnson. The study examines workplace inspections conducted by California’s Division of Occupational Safety and Health (Cal/OSHA).
The authors carried out the first evaluation of a "clinical trial" of the state’s mandated randomized inspections to determine their effect on both worker safety and to companies’ bottom lines.
"The randomized inspections provided the perfect natural experiment that uses the power of randomization just like a medical clinical trial," Toffel says. "Because Cal/OSHA typically inspects facilities following complaints or recent accidents, you can’t study those inspections to get an unbiased understanding of whether they make a difference. By studying the inspections Cal/OSHA conducted at workplaces selected at random, we were able to overcome this problem to learn the actual impact of inspections."
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Inspections Not Detrimental to Employers
The study found that within high-hazard industries in California, inspected workplaces reduced their injury claims by 9.4 percent and saved 26 percent on workers’ compensation costs in the 4 years following the inspection, compared to a similar set of uninspected workplaces.
On average, inspected firms saved an estimated $355,000 in injury claims and compensation for paid lost work over that period. What’s more, there was no discernible impact on the companies’ profits.
"We spent several years collecting data, not just on injuries, which is very important, but also on other indicators to see whether inspections led to problems they are often accused of causing, like whether they increased costs and led to the elimination of jobs. We looked at company survival, employment, sales, and total payroll to see if inspections were detrimental to the employers," says Professor Levine.
"Across the numerous outcomes we looked at, we never saw any evidence of inspections causing harm," Toffel explained. "If OSHA inspections conducted in all 50 states are as valuable as the ones we studied, inspections improve safety worth roughly $6 billion to employers and employees, ignoring pain and suffering. The overall message of our research is that these inspections worked pretty much the way one would hope. They improved safety, and they didn’t cost firms enough that we could detect it."
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The study appears to overturn conventional wisdom that workplace inspections result in elimination of jobs and harm to employers, while doing little to improve overall worker safety. The researchers said they found no evidence to support these frequently cited reasons for limiting or eliminating government inspections of private industry workplaces.
OSHA Chimes In
"OSHA doesn’t kill jobs, says OSHA administrator Dr. David Michaels, "it helps prevent jobs from killing workers.… 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."
Tomorrow, more about this study and information about a safety resource that can help you prepare for inspections.