Is OSHA good or bad for the U.S. economy? A new study gives the agency a boost, at least when safety and health inspections are conducted at random.
Researchers from Harvard Business School, the University of California and Boston University studied 409 companies that were inspected at random by Cal-OSHA. They matched these companies with 409 others that hadn’t been inspected.
Then the researchers compared injury rates for all 818 companies from four years before through four years after the inspection.
Companies that received the random inspections saw injuries decline an average of 9.4% in the four years after the inspection compared with the uninspected businesses.
The results were recently published in the journal Science.
The study also found the cost of the injuries reported fell by 26% for the inspected companies — an average of $350,000 per company. And undergoing the inspections had no effect on employment, total earnings, sales of the survival of the company.
Jon Baron, president of the Coalition for Evidence-Based Policy, a nonprofit, nonpartisan group that seeks to increase government effectiveness, praised the study. “The work is unusual in the strength of the study design,” Baron said. Safety regulations are often put in place without scientifically credible evidence or their likely effects, according to Baron. He says all new government regulations should be studied in this way before being implemented across the board.
What makes this study different? It looks at random inspections, not those that occur after an injury or death, or those that result from complaints.
The law of averages says a company that had a bad year for injuries would usually improve the following year even without an inspection. So when inspections follow injuries, there’s no way of telling whether the visit from OSHA helped or not.
The results could be different for other states or federal OSHA. But if the California results were similar in all 50 states, inspections would benefit all U.S. businesses to the tune of $6 billion a year.
A 1993 state mandate required Cal-OSHA to conduct some of its workplace inspections at random. That’s what allowed the researchers to conduct this study.
What do you think about the study’s results? Does it prove, once and for all, that OSHA inspections help rather than hurt businesses? Let us know what you think in the comments below.