Does regulatory enforcement work? A panel analysis of OSHA enforcement

This study tests the impact of OSHA enforcement on workplace injuries. Using data on injuries and OSHA inspections for a panel of 6,842 large manufacturing plants between 1979 and 1985, we find significant specific deterrence effects. Inspections imposing penalties induce a 22% decline in injuries in the inspected plant during the following few years. We suggest that narrow deterrence perspectives have led to unduly pessimistic assumptions about enforcement effectiveness and that a managerial attention model is more consistent with our findings. In a technical appendix we describe the Chamberlain technique, a powerful analytic approach for panel data that provides tests and corrections for potential biases endemic in enforcement studies, including unmeasured heterogeneity among units, serially correlated dependent variables, and endogeneity of inspections. We argue that more empirical studies of enforcement impacts are necessary to provide an appropriate perspective for descriptive and analytic studies appraising regulatory behavior.

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