Did OSHA save lives?

From Scott Sumner.

"Matt Yglesias recently had this to say about the decline in workplace injuries since  OSHA:

All-in-all, though, it looks like an impressive achievement to me and one the hard-working folks at the National Institute for Occupational Safety and Health deserve some credit for, along with overall economic progress and structural shifts into safer occupational categories.

Update 3/20/11:  Matt pointed out in the comments that I didn’t read his post very carefully:

The agency I actually mentioned in my post is the National Institutes of Occupational Safety and Health (part of the CDC) not OSHA.
NIOSH is an agency dedicated to collecting and disseminating information about workplace industries. They do statistics, they do some of the “information brochures being distributed to workers” stuff you recommend, and they do some kind of training.

[So whatever value the rest of my post might or might not have, it shouldn’t be viewed as a comment on Yglesias.]

This reminded me of a graph I saw years ago in a paper by John Leeth and Tom Kniesner:

They look at a wide variety of evidence (much of which is in other papers, not this one) and conclude that OSHA should be cut back, or perhaps abolished.  Just so you don’t think they are mindless anti-government libertarians, they also argue that workplace compensation insurance is somewhat effective in reducing injuries.  They argue that compensating wage differentials (a market force) is the single most effective deterrent to injuries:

Alternatives to OSHA
In light of its ineffectiveness, giving OSHA more money, personnel, and power is not the way to cost-effective workplace safety. Most protection on the job comes from state workers’ compensation insurance programs and market-determined compensating wage differentials.
State-run workers’ compensation insurance programs are currently the most influential public attempt to promote workplace safety. Insurance premiums that take account of workplace safety encourage firms to establish safe and healthy work environments. As the frequency of claims rises, the price of workers’ compensation insurance increases, thereby penalizing firms for poor safety records. Michael Moore of Duke University and W. Kip Viscusi of Harvard University estimate that, without workers’ compensation insurance, the number of fatal accidents and diseases would be 48 percent higher in the United States.

BTW, there is no obvious “market failure” that would call for regulation.  (And please don’t drag out the tired old argument that companies know the risks, but workers don’t.  That’s not true, and if it were it would call for government information brochures being distributed to workers, not OSHA.)  I find a lot of safety regs to be very annoying.  When I was young I often worked up on ladders.  The newer Skilsaws required two hands to operate, presumably so you wouldn’t cut off some fingers.  That necessitated gripping the ladder with one’s knees.  Power mowers can no longer be operated without holding the handle–forcing contorted body positions when trying to clear debris in the mower’s path.

Matt Yglesias also has a very interesting post on the similarities between some “big government” models (such as the Nordic states) and some “small government” models, such as Singapore, Hong Kong and Chile.  He points out that Singapore’s mandatory savings plan, which has a 35.5% rate, is something like a tax, and the money is deposited in a government run investment fund. I don’t entirely agree with his post (he underestimates the difference between taxes and forced saving), but it’s hard to disagree with the general thrust of his argument .  There isn’t all that much difference between the Nordic economies and the economy cited by the Heritage Foundation as the second most economically free country in the world (and number one if one recalls that HK isn’t really a “country.”)  My initial reaction is to despair that the US is simply too big to adopt either model.  But maybe that’s giving up too easily.

Update:  Commenter Joe pointed to a Bryan Caplan post that cited a David Henderson encyclopedia entry that discussed some Kip Viscusi research on OSHA (did I miss anyone?)

Fun facts from Kip Viscusi‘s article on “Job Safety” in David Henderson’s encyclopedia:
Annual OSHA penalties for safety violations (2002): $149,000,000
Annual Workers Compensation Premiums (2001): $26,000,000,000
Estimated Annual Wage Premiums for Risky Activities (2004 dollars): $245,000,000,000

Bryan suggests that OSHA probably has little effect on injuries."