The business cycle and the incidence of workplace injuries: evidence from the U.S.A

Introduction

The current study explored the association between the business cycle and the incidence of workplace injuries to identify cyclically sensitive industries and the relative contribution of physical capital and labor utilization within industries.

Method

Bureau of Labor Statistics nonfatal injury rates from 1976 through 2007 were examined across five industry sectors with respect to several macroeconomic indicators. Within industries, injury associations with utilization of labor and physical capital over time were tested using time series regression methods.

Results

Pro-cyclical associations between business cycle indicators and injury incidence were observed in mining, construction, and manufacturing but not in agriculture or trade. Physical capital utilization was the highest potential contributor to injuries in mining while labor utilization was the highest potential contributor in construction. In manufacturing each effect had a similar association with injuries.

Conclusion

The incidence of workplace injury is associated with the business cycle. However, the degree of association and the mechanisms through with the business cycle affects the incidence of workplace injuries was not the same across industries.

Impact on Industry

The results suggest that firms in the construction, manufacturing, and mining industries should take additional precautionary safety measures during cyclical upturns. Potential differences among industries in the mechanisms through which the business cycle affects injury incidence suggest different protective strategies for those industries. For example, in construction, additional efforts might be undertaken to ensure workers are adequately trained and not excessively fatigued, while safety procedures continue to be followed even during boom times.