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Unemployment and Workplace Safety: New Evidence on the Pro-Cyclicality of U.S

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Unemployment and Workplace Safety: New Evidence on the Pro-Cyclicality of U.S Essays in Health and Labor Economics by Matthew James Butler A dissertation submitted in partial satisfaction of the requirements of the degree of Doctor of Philosophy in Economics in the GRADUATE DIVISION of the UNIVERSITY OF CALIFORNIA, BERKELEY Committee in Charge: Professor Enrico Moretti, Chair Professor David Card Professor William Dow Fall 2011 Essays in Health and Labor Economics Copyright 2011 by Matthew James Butler Abstract Essays in Health and Labor Economics by Matthew James Butler Doctor of Philosophy in Economics University of California, Berkeley Professor Enrico Moretti, Chair This dissertation examines how occupational injuries vary with the business cycle, the relationship between healthcare staffing levels and patient outcomes, and whether workers are compensated for changes in occupational risk. In the first chapter I examine how fatal and non-fatal occupational injury rates vary over the business cycle. Past research on the relationship between workplace safety and the business cycle has found only non-fatal accidents to be pro-cyclical. The failure of previous research to convincingly identify a pro- cyclical fatality relationship has led researchers to focus on a claims reporting moral hazard explanation of the pro-cyclicality of non-fatal injuries. Using state and firm level workplace safety data and local area unemployment rates, I find that workplace safety is pro-cyclical in both fatal and non-fatal injury rates, contrary to previous research. The occupational fatality rate elasticity (-0.15) is larger in magnitude than its non-fatality counterpart (-0.10). The next chapter explores how a change in nurse staffing levels for intensive care patients improved patient outcomes in Arizona. Using data from the Healthcare Cost and Utilization Project‘s (HCUP) State Inpatient Databases (SID) for Arizona, I evaluate the impact of Arizona‘s October 1, 2002 mandate that no more than three intensive care patients be assigned to one nurse on nurse-sensitive patient health outcomes: mortality, length of stay, pressure ulcers, hospital- acquired pneumonia, urinary tract infections, and sepsis. I contribute to the literature regarding nurse staffing levels‘ impact on patient outcomes in the following ways: 1) the exploitation of the exogenous variation imposed by Arizona‘s regulation provides credible causal estimates of the impact of increased (marginal) nurse staffing levels on patient outcomes—mitigating the potential impact of omitted variables bias inherent in cross-sectional analysis, 2) it provides a sample size large enough to observe changes in low probability events such as hospital mortality, and 3) this is the first analysis of Arizona‘s intensive care services regulation. A difference-in-differences empirical analysis between 1 intensive and non-intensive care patients finds no evidence that intensive care patient outcomes improved after the regulation was imposed. In the final chapter I examine the compensating wage differential for occupational risk in the mining industry. I create a balanced panel of county-year mining labor market observations (including occupational injury rates) from Quarterly Census of Employment and Wages (QCEW) and Mine Safety and Health Administration (MSHA) administrative data. The MSHA‘s mandate to inspect mining operations at least twice a year provides an objective measure of occupational risk through citations and their associated monetary penalties. I estimate the reduced form impact of changing occupational risk on hourly real wages. Employing fixed effect models to mitigate the impact of omitted variables bias, I find that increases in once-lagged citations increase current wages, providing evidence of compensating wages in the mining industry for increases in occupational risk. I estimate a $106,528 compensating wage differential for a non-fatal occupational injury using instrumental variable analysis. 2 To Diana, Soren and Daniel i Contents List of Figures ....................................................................................................... iv List of Tables ..........................................................................................................v Preface .....................................................................................................................1 1 Unemployment and Workplace Safety: New Evidence on the Pro-cyclicality of U.S. Workplace Injuries ....................................................................................2 1.1 Introduction ....................................................................................................2 1.2 Possible Channels of Causation .....................................................................3 1.3 Previous Research ..........................................................................................4 1.4 Analytical Framework ....................................................................................7 1.5 Data and Descriptive Statistics .......................................................................9 1.6 Empirical Approach and Results ..................................................................13 1.7 Conclusion ....................................................................................................20 2 Mandated Intensive Care Staffing and Patient Outcomes: a Natural Experiment ...........................................................................................................30 2.1 Introduction ..................................................................................................30 2.2 Arizona Regulation ......................................................................................31 2.3 Previous Research ........................................................................................32 2.3.1 General Literature Review ................................................................32 2.3.2 California A.B. 394 ...........................................................................33 2.3.3 Intensive Care Services .....................................................................33 2.4 Data Description ...........................................................................................34 2.5 Methodology ................................................................................................36 2.6 Results ..........................................................................................................37 2.6.1 Patient Outcomes ..............................................................................37 2.6.2 Robustness Checks............................................................................39 2.6.3 Nurse Staffing Levels .......................................................................40 2.7 Conclusion ....................................................................................................44 3 Compensating Wage Differentials in the Mining Industry ...........................65 3.1 Introduction ..................................................................................................65 3.2 Previous Research ........................................................................................67 3.3 Data ..............................................................................................................68 3.3.1 Quarterly Census of Employment and Wages (QCEW)...................68 3.3.2 Mine Safety and Health Administration (MSHA) ............................69 ii 3.4 Fixed Effects Estimation ..............................................................................73 3.4.1 Baseline Results ................................................................................73 3.4.2 Wage-Risk Linear Tradeoff ..............................................................76 3.4.3 Monopsony Power ............................................................................77 3.5 Instrumental Variable (IV) Compensating Differential Estimate ................77 3.6 Conclusion ....................................................................................................80 Bibliography .........................................................................................................92 A Appendix to Chapter 2 ..................................................................................104 B Appendix to Chapter 3 ...................................................................................105 iii List of Figures 1.1 State Unemployment Rate Distribution .......................................................21 1.2 Workplace Safety Fatality Rate (CFOI) and Injury or Illness (SOII) ..........22 1.3 ODI Workplace Safety and County Unemployment Rates ..........................23 1.4 Mortality Detail File Variables ....................................................................24 2.1 Arizona Regulation Timeline .......................................................................45 2.2 Mortality and Length of Stay .......................................................................46 2.3 Patient‘s Age ................................................................................................47 2.4 Hospital-acquired Pneumonia and Pressure Ulcers .....................................48 2.5 Urinary Tract Infection (UTI) and Hospital-acquired Sepsis .......................49 2.6 Arizona Annual Full Time Equivalent (FTE) Nurses per Licensed Bed .....50 3.1 Mining Operations in County Histogram .....................................................81 3.2 Real Hourly Wage Histogram ......................................................................82
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