Compensating wage differentials for job fatality and injury risk in Australia

Zac Reynolds; Daehoon Nahm; Craig MacMillan

doi:10.1111/1475-4932.12660

Compensating wage differentials for job fatality and injury risk in Australia

Zac Reynolds^*, Daehoon Nahm, Craig MacMillan

^*Corresponding author for this work

Department of Economics

Research output: Contribution to journal › Article › peer-review

2 Citations (Scopus)

171 Downloads (Pure)

Abstract

This study explores whether compensating wage differentials (CWDs) are still found for Australian workers using data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, and risk data from Safe Work Australia. Our study finds evidence of CWDs for the risk of workplace fatalities that are smaller in magnitude compared to the estimates previously reported in the 1990s for Australia. We find limited evidence of CWDs for the risk of workplace non-fatal injuries. Using panel data and a risk variable that varies by both the worker’s industry and occupation of employment, we find that Australian workers who face the mean level of fatality risk receive a CWD of between 0.13% and 0.44% for a unit increase in risk, depending on the model specification. These estimates correspond to a value of statistical life of $9.7 million and $34.9 million.

Original language	English
Pages (from-to)	152-165
Number of pages	14
Journal	Economic Record
Volume	98
Issue number	321
Early online date	8 Mar 2022
DOIs	https://doi.org/10.1111/1475-4932.12660
Publication status	Published - Jun 2022

Bibliographical note

Copyright © 2022 The Authors. Economic Record published by John Wiley & Sons Australia, Ltd on behalf of Economic Society of Australia. Version archived for private and non-commercial use with the permission of the author/s and according to publisher conditions. For further rights please contact the publisher.

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Cite this

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title = "Compensating wage differentials for job fatality and injury risk in Australia",

abstract = "This study explores whether compensating wage differentials (CWDs) are still found for Australian workers using data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, and risk data from Safe Work Australia. Our study finds evidence of CWDs for the risk of workplace fatalities that are smaller in magnitude compared to the estimates previously reported in the 1990s for Australia. We find limited evidence of CWDs for the risk of workplace non-fatal injuries. Using panel data and a risk variable that varies by both the worker{\textquoteright}s industry and occupation of employment, we find that Australian workers who face the mean level of fatality risk receive a CWD of between 0.13\% and 0.44\% for a unit increase in risk, depending on the model specification. These estimates correspond to a value of statistical life of \$9.7 million and \$34.9 million.",

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Compensating wage differentials for job fatality and injury risk in Australia

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