Volume 16, Number 2 (Spring) 1981
Olson, Craig A. 1981. "An Analysis of Wage Differentials Received by Workers on Dangerous Jobs." Journal of Human Resources 16(2):167-185.
This study examines the wage differentials received by workers on hazardous jobs. The hypothesis that workers are compensated for the risk of experiencing a nonfatal or fatal accident was confirmed using BLS industry accident rates and a sample of full-time workers. The estimated value of a life at the average risk level for the sample implied by the estimated risk premium was about $3.2 million. However, the estimated value of a life declined as risk increased. This was explained by the fact that individuals found on riskier jobs are collectively less risk averse than individuals on safer jobs. An important interaction was also found between fatal accident risk and union status. Compared to nonunion workers, union members received substantially higher fatal accident premiums. These premiums imply that union members collectively place a higher value on life. Various explanations for this difference are discussed.
The author is an Assistant Professor of Industrial Relations and Human
Resources, State University of New York at Buffalo.
* Support for this research was provided by the Graduate School of the
University of Wisconsin and a dissertation grant from the Employment and
Training Administration, U.S. Department of Labor (91-55-77-59). The views
expressed are those of the author and may not reflect the views of the
supporting institutions. The author would like to thank James Stern, Glen Cain,
Donald Schwab, James Chelius, James Dworkin, Joseph Ullman, two anonymous
referees, and the editor for their helpful input on this paper.
© 2003 by the Board of Regents of the University of Wisconsin System
US ISSN 0022-166X