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Does the Value of a Statistical Life Vary with Union: Evidence from Tunisian Data

Published in Economics (Volume 4, Issue 1)
Received: 21 January 2015     Accepted: 29 January 2015     Published: 3 February 2015
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Abstract

This paper measures the value of a statistical life for union and nonunion workers. To avoid the problem of a selectivity biais arising if richer people choose safer jobs, we consider risk as an endogenous variable. The endogeneity of job risk implies that ordinary least squares estimates of the wage equation may be biased and this should be corrected. Accordingly, we use instrumental variables techniques. Using original data from “la Caisse nationale de la sécurité sociale”, we found that organizing workers in union generates a value of statistical life at least two times higher than for non-union workers (344,595.2 dinars for non-union and 985,459.7 dinars for union workers). In addition, we found evidence of wage differentials for hazardous work. However, these values of statistical life are much lower than those estimated in developed countries. This study could provide useful results for policymakers to reduce the risk of death in Tunisia.

Published in Economics (Volume 4, Issue 1)
DOI 10.11648/j.eco.20150401.12
Page(s) 11-17
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2015. Published by Science Publishing Group

Keywords

Compensating Wage Differentials, Unions, Value of Life

References
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[2] Blomquist G. C. (2004), Self-Protection and Averting Behavior, Values of Statistical Lives, and Benefit Cost Analysis of Environmental Policy, Review of Economics of the Household, 2, 89-110.
[3] Brajer V. and M. Rahmatian (2004), From Diye to Value of Statistical Life: A case Study for the Islamic Republic of Iran, Victor California State University, Fullerton2004.
[4] Cropper, Maureen L. and Freeman, A. Myrick (1991), Environmental health effects, In John B. Braden, and Charles D. Kolstad (Eds.), Measuring the Demand for Environmental Quality, 165–221, North-Holland, New York.
[5] Deleire T. and H. Levy (2004), Worker Sorting and the Risk of death on the job, Journal of Labor Economics, 22, 925-953.
[6] Dionne, G. and Lanoie, P. (2004), How to make a public choice about the value of a statistical life: The case of road safety, Journal of Transport Economics and Policy 38, 247 274.
[7] Fairres, D. (1989), Compensating Wage Differentials and Unobserved Productivity, Industrial Relations, 28, 356-72.
[8] Gegax, D., S. Gerking, and W. Schulz (1991), Perceived Risk and the Marginal Value of Safety, Review of Economics and Statistics, 73, 589-96.
[9] Hammit J. K. and J. T. Liu (2004), Effects of disease type and Latency on the Value of Mortality Risk, Journal of Risk and Uncertainty, 28, 73-95.
[10] Hammit, J. K. and J. T. Liu. (2003), Effects of disease type and latency on the value of mortality risk, Working Paper 10012, National Bureau of Economic Research, Cambridge.
[11] Madheswaran, S. (2007), Measuring the value of statistical life: Estimating compensating wage differentials among workers in India, Social Indicators Research, 84, 83-96.
[12] Moore, M., and W. Kip Viscusi (1990), Compensation Mechanisms for Job Risks: Wages, Workers Compensation and Product Liability, Princeton University Press.
[13] Sandy R. and Robert Elliott (2005), Long-Term Illness and Wages: The Impact of the Risk of Occupationally Related Long-Term Illness on Earnings, The Journal of Human Resources, 40, 3, 744-768.
[14] Smith A. (1776), The wealth of nations. University of Chicago Press, Chicago.
[15] Smith, Robert (1979), Compensating Wage Differentials and Public Policy: A Review Indus. and Labor Relations Rev. 32, 339-52.
[16] Thaler, R., and S. Rosen (1976), The Value of Saving a Life: Evidence from the Labor Market, In Household Production and Consumption, edited by Nestor E. Terleckyj, New York: Columbia Univ. Press (for NBER).
[17] Vassanadumrongdee, S. and S. Matsuoka (2005), Risk perceptions and value of a statistical life for air pollution and traffic accidents: Evidence from Bangkok Thailand, Journal of Risk and Uncertainty 30, 261-287.
[18] Viscusi W. Kip (1979), Employment hazards: An investigation of market performance, Cambridge University Press.
[19] Viscusi, W. Kip. and Aldy, J. E. (2002), The value of a statistical life: A critical review of market estimates throughout the world. Harvard University Discussion Paper No. 392, http://www.law.harvard.edu/programs/olinecenter.
[20] Viscusi, W. Kip (1983), Risk by Choice: Regulating Health and Safety in the Workplace Cambridge: Harvard University Press.
[21] Viscusi, W.K. (1993), The value of risks to life and health Journal of Economic Literature, 31, 1912–1946.
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  • APA Style

    Abdelaziz Benkhalifa. (2015). Does the Value of a Statistical Life Vary with Union: Evidence from Tunisian Data. Economics, 4(1), 11-17. https://doi.org/10.11648/j.eco.20150401.12

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    ACS Style

    Abdelaziz Benkhalifa. Does the Value of a Statistical Life Vary with Union: Evidence from Tunisian Data. Economics. 2015, 4(1), 11-17. doi: 10.11648/j.eco.20150401.12

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    AMA Style

    Abdelaziz Benkhalifa. Does the Value of a Statistical Life Vary with Union: Evidence from Tunisian Data. Economics. 2015;4(1):11-17. doi: 10.11648/j.eco.20150401.12

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  • @article{10.11648/j.eco.20150401.12,
      author = {Abdelaziz Benkhalifa},
      title = {Does the Value of a Statistical Life Vary with Union: Evidence from Tunisian Data},
      journal = {Economics},
      volume = {4},
      number = {1},
      pages = {11-17},
      doi = {10.11648/j.eco.20150401.12},
      url = {https://doi.org/10.11648/j.eco.20150401.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20150401.12},
      abstract = {This paper measures the value of a statistical life for union and nonunion workers. To avoid the problem of a selectivity biais arising if richer people choose safer jobs, we consider risk as an endogenous variable. The endogeneity of job risk implies that ordinary least squares estimates of the wage equation may be biased and this should be corrected. Accordingly, we use instrumental variables techniques. Using original data from “la Caisse nationale de la sécurité sociale”, we found that organizing workers in union generates a value of statistical life at least two times higher than for non-union workers (344,595.2 dinars for non-union and 985,459.7 dinars for union workers). In addition, we found evidence of wage differentials for hazardous work. However, these values of statistical life are much lower than those estimated in developed countries. This study could provide useful results for policymakers to reduce the risk of death in Tunisia.},
     year = {2015}
    }
    

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    AU  - Abdelaziz Benkhalifa
    Y1  - 2015/02/03
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    AB  - This paper measures the value of a statistical life for union and nonunion workers. To avoid the problem of a selectivity biais arising if richer people choose safer jobs, we consider risk as an endogenous variable. The endogeneity of job risk implies that ordinary least squares estimates of the wage equation may be biased and this should be corrected. Accordingly, we use instrumental variables techniques. Using original data from “la Caisse nationale de la sécurité sociale”, we found that organizing workers in union generates a value of statistical life at least two times higher than for non-union workers (344,595.2 dinars for non-union and 985,459.7 dinars for union workers). In addition, we found evidence of wage differentials for hazardous work. However, these values of statistical life are much lower than those estimated in developed countries. This study could provide useful results for policymakers to reduce the risk of death in Tunisia.
    VL  - 4
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Author Information
  • Department of Economics, Ecole Supérieure des Sciences Economiques et Commerciales de Tunis, University of Tunisia, Tunis, Tunisia

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