revised version published as 'Are recessions good for workplace safety? ' in: Journal of Health Economics, 2006, 25 (6), 1069-1093
This paper presents a theory and an empirical investigation on cyclical fluctuations in
workplace accidents. The theory is based on the idea that reporting an accident dents the
reputation of a worker and raises the probability that he is fired. Therefore a country with a
high or an increasing unemployment rate has a low (reported) workplace accident rate. The
empirical investigation concerns workplace accidents in OECD countries. The analysis
confirms that workplace accident rates are inversely related to both the level of
unemployment and the change in unemployment. Furthermore, fatal accident rated do not
fluctuate over the cycle. We conclude that our empirical analysis is in line with our theory:
cyclical fluctuations in workplace accidents have to do with reporting behavior of workers and
not with changes in workplace safety.
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