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Estimating Workers' Marginal Willingness to Pay for Safety using Linked Employer–Employee Data

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  • HARALD DALE‐OLSEN

Abstract

In this study, Norwegian linked employer–employee panel data covering 1994–96 are used to estimate workers' marginal willingness to pay (MWP) for safety, thus providing unique comparisons between estimates of MWPs from hedonic wage, quit and job duration models. Hedonic wage regressions show that higher injury hazards imply higher wages. Quit and duration regressions show that higher injury hazards imply higher job exit probabilities, while higher wages reduce the job exit probabilities. Differences in the estimated MWP figures indicate that search frictions cause sizeable bias in MWP figures from hedonic wage models, and that MWP issues should be addressed from a dynamic perspective.

Suggested Citation

  • Harald Dale‐Olsen, 2006. "Estimating Workers' Marginal Willingness to Pay for Safety using Linked Employer–Employee Data," Economica, London School of Economics and Political Science, vol. 73(289), pages 99-127, February.
    • Handle: RePEc:bla:econom:v:73:y:2006:i:289:p:99-127
    DOI: 10.1111/j.1468-0335.2006.00450.x
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    Cited by:

    1. Nikolaos Georgantzis & Efi Vasileiou, 2014. "Are Dangerous Jobs Paid Better? European Evidence," Research in Labor Economics, in: New Analyses of Worker Well-Being, volume 38, pages 163-192, Emerald Group Publishing Limited.
    2. Keith Bender & Colin Green & John Heywood, 2012. "Piece rates and workplace injury: Does survey evidence support Adam Smith?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 569-590, January.
    3. Andreas Kuhn & Oliver Ruf, 2009. "The Value of a Statistical Injury: New Evidence from the Swiss Labor Market," NRN working papers 2009-15, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
    4. Van Ommeren, Jos & Koopman, Marnix, 2011. "Public housing and the value of apartment quality to households," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 207-213, May.
    5. Jos Van Ommeren & Mihails Hazans, 2008. "Workers' Valuation of the Remaining Employment Contract Duration," Economica, London School of Economics and Political Science, vol. 75(297), pages 116-139, February.
    6. Gibbons, Stephen & Silva, Olmo, 2011. "School quality, child wellbeing and parents' satisfaction," Economics of Education Review, Elsevier, vol. 30(2), pages 312-331, April.
    7. Van Ommeren, Jos & Fosgerau, Mogens, 2009. "Workers' marginal costs of commuting," Journal of Urban Economics, Elsevier, vol. 65(1), pages 38-47, January.
    8. Ilaria D’Angelis, 2020. "Are We There? Differences in Search, Preferences and Jobs between Young Highly Educated Male and Female Workers," Boston College Working Papers in Economics 1018, Boston College Department of Economics.
    9. StÈphane Bonhomme & GrÈgory Jolivet, 2009. "The pervasive absence of compensating differentials," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(5), pages 763-795.
    10. Van Ommeren, Jos & Graaf-de Zijl, Marloes, 2013. "Estimating household demand for housing attributes in rent-controlled markets," Journal of Housing Economics, Elsevier, vol. 22(1), pages 11-19.
    11. Giovanni Russo & Jos Ommeren & Piet Rietveld, 2012. "The university workers’ willingness to pay for commuting," Transportation, Springer, vol. 39(6), pages 1121-1132, November.
    12. Geraci, Andrea & L. Bryan, Mark, 2016. "Non-standard work: what’s it worth? Comparing alternative measures of workers’ marginal willingness to pay," ISER Working Paper Series 2016-12, Institute for Social and Economic Research.
    13. Wehn-Jyuan Tsai & Jin-Tan Liu & James Hammitt, 2011. "Aggregation Biases in Estimates of the Value per Statistical Life: Evidence from Longitudinal Matched Worker-Firm Data in Taiwan," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(3), pages 425-443, July.
    14. Jason Sockin, 2022. "Show Me the Amenity: Are Higher-Paying Firms Better All Around?," CESifo Working Paper Series 9842, CESifo.
    15. Alina Grecu & Wolfgang Sofka & Marcus M. Larsen & Torben Pedersen, 2022. "Unintended signals: Why companies with a history of offshoring have to pay wage penalties for new hires," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(3), pages 534-549, April.
    16. Andreas Kuhn & Oliver Ruf, 2013. "The Value of a Statistical Injury: New Evidence from the Swiss Labor Market," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 149(I), pages 57-86, March.
    17. Kuhn, Andreas & Ruf, Oliver, 2009. "The Value of a Statistical Injury: New Evidence from the Swiss Labor Market," IZA Discussion Papers 4409, Institute of Labor Economics (IZA).
    18. Ilaria D'Angelis, 2023. "The Search for Parental Leave and the Early-Career Gender Wage Gap," Working Papers 2023-01, University of Massachusetts Boston, Economics Department.

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