Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80624
Authors: 
Guardado, José R.
Ziebarth, Nicolas
Year of Publication: 
2013
Series/Report no.: 
IZA Discussion Paper 7428
Abstract: 
In this paper, we develop a theoretical model of worker investment in safety. Standard theory assumes that injury risk is exogenous. It predicts that riskier jobs are associated with higher wages. In contrast, in our model, workers make individual safety investments that reduce the risk of injury. This results in a negative association between individual injury risk and wages. We test the model's predictions using obesity as a proxy for worker disinvestments in human capital and safety. In line with our model predictions, we find a significant positive compensating wage differential (CWD) for nonfatal risk at the occupational level. At the same time, however, there exists an underlying significant negative association between individual accident risk and wages, but only in high risk occupations. The latter relationship may downward bias or mask CWD estimates.
Subjects: 
worker investment
safety
nonfatal risk
compensating wage differential
obesity
JEL: 
I10
I12
J24
J31
J62
J71
Document Type: 
Working Paper

Files in This Item:
File
Size
292.66 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.