COMPENSATING WAGE DIFFERENTIALS FOR WORKPLACE ACCIDENTS - EVIDENCE FOR UNION AND NONUNION WORKERS IN THE UK

This article measures compensating wage differentials for job risks fo r union and nonunion workers. Job risk is made endogenous to avoid a s electivity bias arising if more able people choose safer jobs. We find that this adjustment has a considerable effect on the union group, ra ising their fatal risk premium above that of non-union workers. This i mplies that there is more variation in unmeasured ability in the union ized group, and that job risk is an inferior good. The fact that union ized workers are also found in safer jobs might therefore be attributa ble to their greater wealth, rather than to greater ''knowledge'' in t he unionized plant. The estimated statistical value of a life is 8.8 p ound million in 1990 prices for union workers, with nonunion workers a bout 20% lower.