Analysis Of The Economics Of Occupational Safety And Workers' Compensation

In recent years, mining accidents are frequently reported in newspaper. Especially, since second half year of 2004, the significant accidents of above 10 and 30 peoples have frequently occurred. And Liaoning province is a classical industry province of our country, so the occupational safety problems of it are especially serious. Under the assigned mechanism of the existing occupational safety legislation and supervision, this article will study that under adverse selection and moral hazard frame, to occupational safety, what effect the rescued mechanism of the workers' compensation insurance has, and then give some policy suggestions.The workers' compensation insurance has a developing progress from the workers' responsibility principle; the employer' error compensation principle to the non-error compensation principle, which has a good effort on dispersing occupation safety risk. But because of non-perfect information, there are adverse selection and moral hazard on occupation safety and workers' compensation insurance market. When wage and firm investment is constant, the increase of compensation will reduce worker's precautions, and lure workers to cheat or to report injury instead of work' wound, thus increasing quantity of the work' accident report. And because it needs the complex medical testify, filling table and carrying on diagnosis under the monitoring condition, the accident report results on a cost of time and resources. The increase of compensation will make workers to lengthen as far as possible their convalescence, however controlling it needs a complex medical diagnosis and a arbitration evidence, so which can delay compensation payment, thus violating the intention of workers' compensation insurance. To firm, if the compensation must be determined according to the record of the firm' accident, the increase of workers' compensation will increase the cost of the firm, so the firm improve its precaution under workers' prevent assigned. Moreover, the higher of the compensation level result on the more motive of the firm to overthrow this report, thus reducing the quantity of it. Therefore, the influence of compensation level to quantity of the accident report is indefinite. Moreover, the perception to occupational risk of the staff and the film can also affect the level of the insurance and the safety. Sometime, misperception leads to sub-optimal insurance level but excessive safety precautions. Worker underestimation of risk could need mandatory insurance, but the level of safety may fall as a result of this policy because workers will attempt to substitute wages for safer jobs. So we give advices as follows: First, under strengthening the safety legislation and monitor, the commercial operation mechanism should be introduced to the domain of safety and workers' compensation insurance for improving the flaw of no perfect information. The government should develop the employer liability and person accident injury insurance, and so on, while persisting and perfect social insurance system. Then both can help each other, serve and promote the work of safety. Second, learning Germany Workers' compensation insurance Association, in the industry and domain of serious accident happening, such as the coal mine, the non-coal mine, the danger goods, the fireworks firecracker, the building and so on, the workers' compensation insurance of same industry should be explored and carried on, the fund of it should be established according to the principle of bearing risk together. The fund should be used to preventing, medical service and compensation, lead to the workers' compensation insurance mechanism in which insures and prevent closely union. Third, in the industrial level, the film should strictly imply the standard of safe production, rule the work of checking the film's productivity, sets up the major industry group, jointly improve the small film. The film should enhance the overall quality of employed staff, raises the worker's perception of risk, imply the system of the worker being admitted.