The Effects of New York’s Labor Law 240 on Worker Safety

The authors examine the effects of New York’s Labor Law 240, known as the Scaffold Law, on worker safety. This law is important because it generates much litigation and significantly increases the cost of infrastructure projects in the state, especially through insurance. Supporters of the 19th century law argue that it enhances worker safety. Critics suggest that it creates moral hazard, or reduced investment in precaution, on the part of workers. The authors assemble the first-ever panel data set across states, time, and economic activities to empirically examine those competing claims. The authors' data set includes 3,382 observations from 2000 to 2010 across 42 states and a variety of commercial activities. Using standard panel data techniques such as year-fixed effects, state-fixed effects, and robust standard errors, the authors found that New York’s Scaffold Law increases both fatal and nonfatal construction accidents. This effect is significant in magnitude, and is consistent with the predictions of standard models of liability rules. The authors conclude their study by examining the effect of Labor Law 240 on insurance loss costs in the state, finding that it significantly increases the cost of infrastructure construction through higher insurance costs, which is also consistent with reduced worker safety. The authors' analysis questions the ongoing efficacy of the law.

Language

  • English

Media Info

  • Media Type: Digital/other
  • Features: Appendices; Figures; References; Tables;
  • Pagination: 41p
  • Monograph Title: TRB 94th Annual Meeting Compendium of Papers

Subject/Index Terms

Filing Info

  • Accession Number: 01551616
  • Record Type: Publication
  • Report/Paper Numbers: 15-3226
  • Files: PRP, TRIS, TRB, ATRI
  • Created Date: Dec 30 2014 1:05PM