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The determinants of federal and state enforcement of workplace safety regulations: OSHA inspections 1990–2010

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Abstract

We explore the determinants of inspection outcomes across 1.6 million Occupational Safety and Health Agency (OSHA) audits from 1990 through 2010. We find that discretion in enforcement differs in state and federally conducted inspections. State agencies are more sensitive to local economic conditions, finding fewer standard violations and fewer serious violations as unemployment increases. Larger companies receive greater lenience in multiple dimensions. Inspector issued fines and final fines, after negotiated reductions, are both smaller during Republican presidencies. Quantile regression analysis reveals that Presidential and Congressional party affiliations have their greatest impact on the largest negotiated reductions in fines.

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Notes

  1. For a discussion of the administrative stages between legislation and enforcement, see Croley (1998).

  2. Scholz and Wei (1986) address this specific question and use aggregate inspection outcome data from 1976 to 1983 to explore the determinants of the total number of inspections and violations across states. They focus on the determinants of violation citations, but do not speak to agency discretion after the initial assessment has been made.

  3. See Occupational Safety and Health Act, 29 U.S.C. 651–678 (1976).

  4. Total number of inspectors includes 64 inspectors in Puerto Rico and the Virgin Islands (cited from AFL-CIO OSHA records in U.S. Department of Labor, OSHA. Summary of Federal CSHO Totals by State FY 2010 and Summary of State Safety and Health Compliance Staffing, FY 2010.).

  5. This number includes federal and state inspections of private companies only.

  6. Compare http://www.osha.gov/dcsp/osp/index.html

  7. The motivation for using a logit model instead of a probit is simply the logit model’s greater propensity for converging in our specifications with the largest number of observations. Results from the two are largely indistinguishable when both converge, as are estimates of subsamples when they fail to converge with the full set.

  8. We use a subsample (two-part) OLS procedure for estimating the determinants of whether firms receive a fine and the dollar amount of subsequent fines. We also estimated a Heckman selection model and found no significant differences in the results. Furthermore, there is no a priori reason to believe that selection effects will be strong, nor is there a natural variable to employ as an exclusion restriction. For these reasons we believe two-part OLS to be the preferred model (Leung and Yu 1996; Puhani2000).

  9. The “rank within party” variable orders the members of a congressional committee based on the Resolution that appointed the members. Highest ranking members have the lowest number. The chair and ranking member always have a rank of 1 within their party.

  10. We tested for the possibility of spillover effects (Shimshack and Ward 2005) using a lagged dummy variable that indicated if an inspection had occurred at any site within the firm’s zip code in the previous year. This indicator was not significant in any of the tested specifications.

  11. We use a logarithmic transformation of initial fines because of the high degree of skewness in the data.

  12. All semi log marginal effects of dummy variables are calculated as the effect of going from a 0 to 1, or simply exp \((\beta )- 1\).

  13. Tables with the results from these alternative specifications can be found in the Technical appendix, available from the authors by request.

  14. The possibility of a small number of large firms driving the results is to be expected, given that firm size is Zipf-distributed (Axtell 2001).

  15. All of our attempts to use cluster errors via bootstrapping failed to converge. The use of errors robust to heteroskedasticity and misspecification increase the reliability of the results, but it is reasonable to expect that errors will be correlated within each state’s governing agency.

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Acknowledgments

We thank Garrett Harmon for much valued research assistance. We thank Richard Spitz at the Department of Labor for his assistance retrieving the data. We thank Reba O’Connor and Mischelle Vanreusel for their insight into OSHA protocol. This project was also supported by Pioneer Award Number DP1OD003874 awarded to J.M. Epstein by the Office of the Director, National Institutes of Health. The content is solely the responsibility of the authors and does not necessarily represent the official views of the Office of the Director, National Institutes of Health or the National Institutes of Health, or the Office of Naval Research. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.

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Authors and Affiliations

  1. Department of Economics, Towson University, 8000 York Rd. Stephens Hall, Towson, MD, 21250 , USA

    Juergen Jung

  2. Department of Emergency Medicine, Center for Advanced Modeling of the Social, Behavioral, and Health Sciences, Johns Hopkins University, Baltimore, MD, USA

    Michael D. Makowsky

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  1. Juergen Jung
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  2. Michael D. Makowsky
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Correspondence to Michael D. Makowsky.

Appendix

Appendix

1.1 Appendix 1: OSHA inspection prioritization

  1. 1.

    Imminent danger situations hazards that could cause death or serious physical harm—receive top priority. Compliance officers will ask employers to correct these hazards immediately—or remove endangered employees.

  2. 2.

    Fatalities and catastrophes incidents that involve a death or the hospitalization of three or more employees—come next. Employers must report such catastrophes to OSHA within 8 h.

  3. 3.

    Complaints allegations of hazards or violations also receive a high priority. Employees may request anonymity when they file complaints.

  4. 4.

    Referrals of hazard information from other federal, state or local agencies, individuals, organizations or the media receive consideration for inspection.

  5. 5.

    Follow-ups checks for abatement of violations cited during previous inspections—are also conducted by the agency in certain circumstances.

  6. 6.

    Planned or programmed investigations inspections aimed at specific high-hazard industries or individual workplaces that have experienced high rates of injuries and illnesses—also receive priority. (Osha Inspections Fact Sheet).

1.2 Appendix 2: OSHA inspection protocol

Preparation Before conducting an inspection, OSHA compliance officers research the inspection history of a worksite using various data sources, review the operations and processes in use and the standards most likely to apply. They gather appropriate personal protective equipment and testing instruments to measure potential hazards.

Presentation of credentials The onsite inspection begins with the presentation of the compliance officer’s credentials, which include both a photograph and a serial number.

Opening conference The compliance officer will explain why OSHA selected the workplace for inspection and describe the scope of the inspection, walkaround procedures, employee representation and employee interviews. The employer then selects a representative to accompany the compliance officer during the inspection. An authorized representative of the employees, if any, also has the right to go along. In any case, the compliance officer will consult privately with a reasonable number of employees during the inspection.

Walkaround Following the opening conference, the compliance officer and the representatives will walk through the portions of the workplace covered by the inspection, inspecting for hazards that could lead to employee injury or illness. The compliance officer will also review worksite injury and illness records and posting of the official OSHA poster. During the walkaround, compliance officers may point out some apparent violations that can be corrected immediately. While the law requires that these hazards must still be cited, prompt correction is a sign of good faith on the part of the employer. Compliance officers try to minimize work interruptions during the inspection and will keep confidential any trade secrets they observe.

Closing conference After the walkaround, the compliance officer holds a closing conference with the employer and the employee representatives to discuss the findings. The compliance officer discusses possible courses of action an employer may take following an inspection, which could include an informal conference with OSHA or contesting citations and proposed penalties. The compliance officer also discusses consultation and employee rights.

Results OSHA must issue a citation and proposed penalty within 6 months of the violation’s occurrence. Citations describe OSHA requirements allegedly violated, list any proposed penalties and give a deadline for correcting the alleged hazards. Violations are categorized as other-than-serious, serious, willful, repeated and failure to abate. Penalties may range up to $7,000 for each serious violation and up to $70,000 for each willful or repeated violation. Penalties may be reduced based on an employer’s good faith, inspection history, and size of business. For serious violations, OSHA may also reduce the proposed penalty based on the gravity of the alleged violation. No good faith adjustment will be made for alleged willful violations.

Appeals When OSHA issues a citation to an employer, it also offers the employer an opportunity for an informal conference with the OSHA Area Director to discuss citations, penalties, abatement dates or any other information pertinent to the inspection. The agency and the employer may work out a settlement agreement to resolve the matter and to eliminate the hazard. OSHA’s primary goal is correcting hazards and maintaining compliance rather than issuing citations or collecting penalties. Alternatively, employers have 15 working days after receipt of citations and proposed penalties to formally contest the alleged violations and/or penalties by sending a written notice to the Area Director. OSHA forwards the contest to the Occupational Safety and Health Review Commission for independent review. Alternatively, citations, penalties and abatement dates that are not challenged by the employer or settled become a final order of the Occupational Safety and Health Review Commission. (OSHA Inspections Fact Sheet).

1.3 Appendix 3: tables and figures

See Appendix Tables 1, 2, 3, 4, 5, 6 and 7.

Table 6 Violation (1/0)—logit and OLS regressions comparing single to double clustering
Full size table
Table 7 Fine/warning (1/0)—logit and OLS regressions comparing single to double clustering
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1.4 Appendix 4: figures

See Appendix Figures 1, 2, 3 and 4.

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Jung, J., Makowsky, M.D. The determinants of federal and state enforcement of workplace safety regulations: OSHA inspections 1990–2010. J Regul Econ 45, 1–33 (2014). https://doi.org/10.1007/s11149-013-9229-4

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