COMPENSATING DIFFERENTIALS FOR RISK OF DEATH IN AUSTRALIA

The theory of compensating wage differentials suggests that for worker s with similar human capital and other characteristics, earnings shoul d be relatively high in industries where there is an above average ris k of death. Using data from Worksafe Australia, this paper confirms th e existence of such differentials in Australia. A worker facing the me an fatality risk would receive between 2.8 and 4.8 per cent higher ear nings than a worker in a job where there is no risk of death. The lowe r estimate is similar to that reported by Kniesner and Leeth (1991). T he estimated wage differentials are used to calculate the implicit val ue of a life.