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Employment hazards: An investigation of market performance
Recent Publications
155
would be needed for a close comparison. The low rate of auto ownership and high rate of rail trips per person suggest a population made up predominantly of rail users. However, 47.5% of auto fatalities occur among bystanders (pedestrians) and bicyclists. The pedestrian and bicyclist fatalities greatly exceed rail fatalities. Are Japanese citizens safer as regular rail passengers than in their exposure to highway traffic as unpowered pedestrians or bicyclists? Many of the highway programs are reminiscent of those developed in earlier stages of highway growth in the U.S. Traffic engineering which required four or five decades to develop here is being applied by Japan in a ten year period. As in the U.S., the fatality rate declined after highway engineering changes. It is at least plausible that the improvement rate could be a result of the telescoped application time. Traffic engineering and highway engineering seem to have been applied at such a rate that diminished results may be near only ten years after the plan began. A reasonable and rapid adaptation of available ideas has occurred, yet innovative methods appeared during the process. Now they are published in English as a contribution to users everywhere. If Japanese industrial history repeats, we might expect new and improved versions of safety programs soon to be offered at a lower price! Is it valid to think about the safety level of Japanese imported cars when noting that automobile safety is scarcely mentioned in the White Paper? Vehicle safety is discussed largely in terms of progress in trucks, In this country we are testing the Japanese vehicles themselves so that any implications of the omitted subjects of vehicle safety can be verified by the product tests. innovative safety processes do not enter into the balance of trade, but there is much about this White Paper which suggests that transport safety and organization may be at the same stage in Japan as were cameras, electronics, shipbuilding, in past decades. On the other hand, safety products do enter into the balance of trade, so that absence of claims for advanced safety in automobiles might be signi~cant. The present gains of Japan’s auto industry rely on small car technology and quality production. it is interesting to consider whether the Japanese auto industry will still be where it is now when our own industry completes revisions to meet the small car market. The plans reported in the White Paper were laid down between five and ten years ago, and the Japanese government is plan-oriented. It is also considered relatively close to private industry. In this country the rate of use of auto safety technology was determined perhaps not so much by availability as by arguments over the necessity of requiring it. However, there is no built-in requirement that safety be proven cost-beneficial in the Japanese program. The White Paper shows that safety in all modes of transport is applied if it seems technically feasible. The nature of the decision process is not explained. In that context, the appearance now is that Japan is moving toward even smaller automobiles, perhaps down to 1400 pounds. But it is hard to believe that Japan’s government and auto industry would be expected to stand still while our own industry converts to small cars which are now long in the Japanese experience. It is logical to wonder whether, in view of the Japanese adaptability and their history of time-condensed progress, Japanese engineers have also studied production possibilities in U.S.-published automobile safety technology. The White Paper carries a subscript credit to the International Association of Traffic and Safety Sciences, which apparently handled some portion of the document’s production. HENRY H. WAKEIAND
Empi~yment Hazards: An Investigation of Market Performance. W. Kip Viscusi. Harvard Economics Studies, Vol. 148. Harvard University Press, Cambridge, Mass. 1979. 308 pp. $20.00, During the last decade there has been a growing dispute over government regulation, with the supporters of “deregulation” or “regulatory reform” advocating the use of market incentives to achieve social goals. The proponents of government regulation, on the other hand, view market solutions of social problems with a great deal of suspicion. One of the major justifications for
156
Recent Puhlicatmnt
regulating occupational health and safety is the assertion that labor markets function very poorly. This book is an interesting and original analysis of the role of market behavior in determining workers’ and employers’ responses to occupational hazards. The author’s major conclusions are that labor markets function reasonably well in this area. These conclusions, which follow from both conceptual and empirical analysis, are supportive of those who would like to see the role of the Occupational Safety and Health Administration (OSHA) significantly reduced. The first part of this book is a theoretical analysis of models of individual job choice, and their relatjonship to occupational safety and health. The second part of the book describes decisions by firms and their impact on workplace hazards. Viscusi’s most interesting and innovative contribution is his description of workers’ behavioral responses to job hazards. He develops a model in which workers applying for jobs learn about workplace hazards largely after beginning employment. They then decide whether to stay at the job, whose hazards they understand well, or to quit and look for a job which they believe will be more suitable. Both the theoretical and empirical analysis in this book imply that, as a result of learning about health and safety risks, workers quit their jobs more often in hazardous industries than in safe industries. Viscusi suggests that this quitting is adaptive labor market behavior in the face of high and uncertain job risks, and that quitting may be a very effective response to workplace hazards. A second major topic in this book is a discussion of wage premiums for hazardous employment. Where wage premiums exist, they are often seen as evidence that workers are trading workplace safety for increased income. As in the case of hazard-induced turnover, this suggests that labor markets are responding to hazardous employment conditions. Chapter Two develops a conceptual model of the relationship between wages and working conditions. Later, Viscusi estimates the wage premiums paid to workers for extra job hazards. This is the best and most careful attempt to date to measure “hazard wages”. The analysis of data from the 1969-70 University of Michigan survey of working conditions suggests that workers are paid on the average, over $1 million dollars (in 1969 dollars) to compensate for the risk of a lost life. The extra payment for the risk of a non-fatal injury is about $10.000. Unionized workers appear to have much higher earnings premiums than do unorganized workers. In addition to the two major areas reviewed here. the book covers several other topics. There are two interesting chapters on the problem of employers’ supplying workers with adequate information about job hazards. Other chapters discuss life cycle effects and job risks, the role of unions, and worker perceptions of job jazards. Viscusi describes adaptive market responses to both the existence of job hazards and uncertainty about those hazards. He provides estimates of the impact of job hazards on quit rates and risk premiums. How!ever, he does not (and in principle cannot) tell us whether these adaptive market responses to risk are s~~~cient to warrant reduced regulation of occupational health and safety. On the contrary, there are a variety of institutional barriers to labor mobility, such as discrimination and seniority rights. These factors limit the ability of market behavior to adequately reflect worker preferences about exposure to health and safety risks. As Viscusi notes, “These and other shortcomings of market outcomes can potentially be alleviated by some form of governmental intervention” (p. 274). The form and extent of that intervention continues to be a major topic of controversy. LI-SI.IEI. BODEK Ocrupctional Health Program Harrard School of Public Health
Traffic Law Enforcement. Donald J. Basham, Sergeant, California Highway Patrol; Instructor, College of the Redwoods, Eureka, California. Charles C. Thomas. Publisher, Springfield, Illinois, 1978. 163 pp. $9.75. This book provides an informative overviewg of the basic trail% law enforcement responsibilities of the operational level patrol ofhcer. It appears to be based primarily upon the prior training.
155
would be needed for a close comparison. The low rate of auto ownership and high rate of rail trips per person suggest a population made up predominantly of rail users. However, 47.5% of auto fatalities occur among bystanders (pedestrians) and bicyclists. The pedestrian and bicyclist fatalities greatly exceed rail fatalities. Are Japanese citizens safer as regular rail passengers than in their exposure to highway traffic as unpowered pedestrians or bicyclists? Many of the highway programs are reminiscent of those developed in earlier stages of highway growth in the U.S. Traffic engineering which required four or five decades to develop here is being applied by Japan in a ten year period. As in the U.S., the fatality rate declined after highway engineering changes. It is at least plausible that the improvement rate could be a result of the telescoped application time. Traffic engineering and highway engineering seem to have been applied at such a rate that diminished results may be near only ten years after the plan began. A reasonable and rapid adaptation of available ideas has occurred, yet innovative methods appeared during the process. Now they are published in English as a contribution to users everywhere. If Japanese industrial history repeats, we might expect new and improved versions of safety programs soon to be offered at a lower price! Is it valid to think about the safety level of Japanese imported cars when noting that automobile safety is scarcely mentioned in the White Paper? Vehicle safety is discussed largely in terms of progress in trucks, In this country we are testing the Japanese vehicles themselves so that any implications of the omitted subjects of vehicle safety can be verified by the product tests. innovative safety processes do not enter into the balance of trade, but there is much about this White Paper which suggests that transport safety and organization may be at the same stage in Japan as were cameras, electronics, shipbuilding, in past decades. On the other hand, safety products do enter into the balance of trade, so that absence of claims for advanced safety in automobiles might be signi~cant. The present gains of Japan’s auto industry rely on small car technology and quality production. it is interesting to consider whether the Japanese auto industry will still be where it is now when our own industry completes revisions to meet the small car market. The plans reported in the White Paper were laid down between five and ten years ago, and the Japanese government is plan-oriented. It is also considered relatively close to private industry. In this country the rate of use of auto safety technology was determined perhaps not so much by availability as by arguments over the necessity of requiring it. However, there is no built-in requirement that safety be proven cost-beneficial in the Japanese program. The White Paper shows that safety in all modes of transport is applied if it seems technically feasible. The nature of the decision process is not explained. In that context, the appearance now is that Japan is moving toward even smaller automobiles, perhaps down to 1400 pounds. But it is hard to believe that Japan’s government and auto industry would be expected to stand still while our own industry converts to small cars which are now long in the Japanese experience. It is logical to wonder whether, in view of the Japanese adaptability and their history of time-condensed progress, Japanese engineers have also studied production possibilities in U.S.-published automobile safety technology. The White Paper carries a subscript credit to the International Association of Traffic and Safety Sciences, which apparently handled some portion of the document’s production. HENRY H. WAKEIAND
Empi~yment Hazards: An Investigation of Market Performance. W. Kip Viscusi. Harvard Economics Studies, Vol. 148. Harvard University Press, Cambridge, Mass. 1979. 308 pp. $20.00, During the last decade there has been a growing dispute over government regulation, with the supporters of “deregulation” or “regulatory reform” advocating the use of market incentives to achieve social goals. The proponents of government regulation, on the other hand, view market solutions of social problems with a great deal of suspicion. One of the major justifications for
156
Recent Puhlicatmnt
regulating occupational health and safety is the assertion that labor markets function very poorly. This book is an interesting and original analysis of the role of market behavior in determining workers’ and employers’ responses to occupational hazards. The author’s major conclusions are that labor markets function reasonably well in this area. These conclusions, which follow from both conceptual and empirical analysis, are supportive of those who would like to see the role of the Occupational Safety and Health Administration (OSHA) significantly reduced. The first part of this book is a theoretical analysis of models of individual job choice, and their relatjonship to occupational safety and health. The second part of the book describes decisions by firms and their impact on workplace hazards. Viscusi’s most interesting and innovative contribution is his description of workers’ behavioral responses to job hazards. He develops a model in which workers applying for jobs learn about workplace hazards largely after beginning employment. They then decide whether to stay at the job, whose hazards they understand well, or to quit and look for a job which they believe will be more suitable. Both the theoretical and empirical analysis in this book imply that, as a result of learning about health and safety risks, workers quit their jobs more often in hazardous industries than in safe industries. Viscusi suggests that this quitting is adaptive labor market behavior in the face of high and uncertain job risks, and that quitting may be a very effective response to workplace hazards. A second major topic in this book is a discussion of wage premiums for hazardous employment. Where wage premiums exist, they are often seen as evidence that workers are trading workplace safety for increased income. As in the case of hazard-induced turnover, this suggests that labor markets are responding to hazardous employment conditions. Chapter Two develops a conceptual model of the relationship between wages and working conditions. Later, Viscusi estimates the wage premiums paid to workers for extra job hazards. This is the best and most careful attempt to date to measure “hazard wages”. The analysis of data from the 1969-70 University of Michigan survey of working conditions suggests that workers are paid on the average, over $1 million dollars (in 1969 dollars) to compensate for the risk of a lost life. The extra payment for the risk of a non-fatal injury is about $10.000. Unionized workers appear to have much higher earnings premiums than do unorganized workers. In addition to the two major areas reviewed here. the book covers several other topics. There are two interesting chapters on the problem of employers’ supplying workers with adequate information about job hazards. Other chapters discuss life cycle effects and job risks, the role of unions, and worker perceptions of job jazards. Viscusi describes adaptive market responses to both the existence of job hazards and uncertainty about those hazards. He provides estimates of the impact of job hazards on quit rates and risk premiums. How!ever, he does not (and in principle cannot) tell us whether these adaptive market responses to risk are s~~~cient to warrant reduced regulation of occupational health and safety. On the contrary, there are a variety of institutional barriers to labor mobility, such as discrimination and seniority rights. These factors limit the ability of market behavior to adequately reflect worker preferences about exposure to health and safety risks. As Viscusi notes, “These and other shortcomings of market outcomes can potentially be alleviated by some form of governmental intervention” (p. 274). The form and extent of that intervention continues to be a major topic of controversy. LI-SI.IEI. BODEK Ocrupctional Health Program Harrard School of Public Health
Traffic Law Enforcement. Donald J. Basham, Sergeant, California Highway Patrol; Instructor, College of the Redwoods, Eureka, California. Charles C. Thomas. Publisher, Springfield, Illinois, 1978. 163 pp. $9.75. This book provides an informative overviewg of the basic trail% law enforcement responsibilities of the operational level patrol ofhcer. It appears to be based primarily upon the prior training.