Thesis title: An empirical analysis of Occupational Safety and Health: economic drivers and the impact of ISI-Inail initiative on business survival
Safety at work is a relevant topic that is increasingly attracting the attention of institutions, trade union organizations, researchers and policy makers. The appreciation of real social and human progress (and concrete economic development) achieved by modern societies cannot be merely associated with economic growth, but must also be inextricably linked to the ability of the Market itself and the State (i.e., through all the competent public administrations) to fulfil the duty to promote a «healthy, safe and adequate working environment and data protection» (Articles 2, 32 and 41 of the Constitution; tenth principle of the European Pillar of Social Rights). This is also relevant for the protection of the right to equality in health and safety protection for all workers.
The present manuscript is oriented to investigate the economic drivers of Occupational Safety and Health (OSH) and the impact of ISI-Inail 2013 initiative on business survival.
Chapter 1 presents an empirical investigation of the determinants of workplace accidents across Europe by focusing on the relevance of production system characteristics—employment sectoral risk, firm size, temporary contracts—business cycle and socioeconomic factors—Gross Domestic Product (GDP), level of investment, unemployment, education—and other territorial controls (crime index). The panel is composed of 27 European countries over the period 2010-2018. All data are sourced from Eurostat. By implementing different estimation methodologies (pooled OLS, panel fixed effects model and panel random effects model), robust evidence that the structural characteristics of the production system, business cycle controls and other territorial variables are effective in explaining the path of workplace accidents in Europe are found, also considering underreporting behaviour. Finally, it emerges the evidence of a nonlinear relationship between GDP and occupational accidents. From the perspective of policy implications, to ensure better working conditions, particularly for the most vulnerable workers, The findings suggest that the business cycle should be considered in European OSH policies. Although economic growth can have a negative influence on the rate of occupational injury incidence, when linked to advancements in technological assets (e.g., Industry 4.0), it can improve workers' health, safety, and well-being.
The aim of the Chapter 2 is twofold. First, it investigates workplace accidents in Italy at the provincial (Nomenclature des unités territoriales statistiques –NUTS– 3) level by accounting for the business cycle, productive system, workforce demographics, and institutional variables. Second, the underreporting hypothesis is tested by exploring the theory that rates of minor injury can be explained by both working conditions and the willingness of workers to report injuries. The analysis shows that at the Italian provincial level, the business cycle (unemployment, added value, and rate of change of investment/GDP) strongly affects the pattern of workplace accidents. Moreover, the results show statistically significant relationships among the productive system (firm size, territorial sectoral structure, and workforce skill composition), workforce demographic characteristics (gender and age), institutional variables (nonregularly employed and compliance with the legal norm index) and occupational accidents rate alternatively defined with different indicators.
Therefore, the analysis seemingly confirms the complexity of the phenomenon, which should be considered for possible policy interventions. It also suggests that, especially in economic downturns, selective public policies geared towards supporting occupational safety and health investment should complement conventional policy options (rule enforcement and training). Finally, the results indicate that policies should focus on the most vulnerable workers, such as low-paid, low-skilled, precarious, and young workers, and on their full reporting of injuries to avoid inconsistent reporting over the business cycle.
Chapter 3, within the framework of the ISI (Incentives to Support Firms) call evaluation process, represents a first phase that involves the implementation of a theory-based approach. The analysis performed in this Chapter is prodromic with respect to the subsequent ex-post impact evaluation of ISI calls, the policy that, since 2010, the Italian National Institute for Insurance against Accidents at Work (Inail) is implementing. The policy has the purpose of supporting firms through direct aid (in the form of a non-repayable financial grant) for promoting enterprises’ investments oriented to enhance the level of safety and health in the workplace. However, Inail policy allowing fixed investments could be seen as an industrial policy and, in this vein, it could affect bankruptcy of enterprises. To this end, in light of the existing literature, the methodological approach of the Theory of Change (Weiss, 1997) is applied, by analysing the theoretical causal chain through which the input—the funding provided by the ISI-Inail call—is hypothesised to act on the indirect outcome—that is, the firms’ survival. Within the framework of the ISI call evaluation process, this chapter represents a first phase that involves the implementation of a theory-based analysis, which is prodromic with respect to the subsequent ex-post impact evaluation of the intervention measure. The results show that, at least theoretically, this has potentially the effect of improving company performances in terms of lower costs incurred and higher worker productivity. These results, together with technological innovation achieved by replacing old machinery or mechanising a previously manual process, are theoretically capable of decreasing the probability of firms’ bankruptcy.
Based on this background, Chapter 4 analyses if Inail’s policy in place in 2013 has an indirect effect on firms’ survival. Using a unique dataset provided by Inail, to account for a potential selection bias linked to the admistrative procedure of the subsidy, first the Intention-to-Treat (ITT) is considered. ITT includes all randomized firms, according to treatment assignment, regardless of whether they are actually treated or not. However, the assignment effect estimate based on the ITT is conservative. Thereafter, the analysis provides a second estimate of the ISI initiative Average Treatment Effect (ATE) by removing the firms that were intended to be treated but were not. To this end, two types of matching methods (Nearest Neighbour and Propensity Score Matching) are applied to compare the firms that received funding (which defines the treatment variable) with those most similar in the not assigned group. The main result of the analysis reveals that the policy has a statistically significant effect on the survival probability and resilience of the firms. In particular, as expected, the conservative effect obtained with the ITT is lower than the post-matching ATE estimate. The main policy implications of this work is that extending the OSH policy mix to include not only regulation and enforcement (sticks), but also direct incentives (carrots), especially in the case of SMEs, could improve the average OSH levels in the business sector and, in an industrial policy perspective, the firms’ economic performance.