Willingness to Pay for Workplace Safety

This paper develops a revealed-preference approach that uses budget constrain discontinuities to price workplace safety. We track hourly workers who face the decision of how many hours to work at varying levels of Covid-19 risk and leverage state-specific discontinuities in unemployment insurance el...

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Bibliographic Details
Published in:IDEAS Working Paper Series from RePEc 2021-01
Main Authors: Anelli, Massimo, Koenig, Felix
Format: Article
Language:English
Subjects:
Occupational safety
Willingness to pay
Online Access:Request full text
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Summary:This paper develops a revealed-preference approach that uses budget constrain discontinuities to price workplace safety. We track hourly workers who face the decision of how many hours to work at varying levels of Covid-19 risk and leverage state-specific discontinuities in unemployment insurance eligibility criteria to identify the labor supply behavior. Results show large baseline responses at the threshold and increasing responses for higher health risks. The observed behavior implies that workers are willing to accept 34% lower incomes to reduce the fatality rate by one standard deviation, or 1% of income for a one in a million chance of dying.