Compensating Differentials for Gender-Specific Job Injury Risks

Abstract

Women have largely been excluded from analyses of compensating differentials for job risk since they are predominantly employed in safer, white-collar occupations. New data reveal that their injury experience is considerable. One-third of the total injury and illness cases with days away from work accrue to female workers. Adjusted for employment, women are 71 percent as likely as men to experience an injury or illness. As one would predict on theoretical grounds, these risks generate compensating differentials. Based on gender-specific injury incidence rates for both industry and occupation, I find strong evidence of compensating wage differentials for the job risk faced by female workers. Furthermore, all women -- not only women in the riskier blue-collar jobs -- receive a substantial and statistically significant premium for bearing job risk. Occupational risk has a larger impact on the wage rate than industry risk, and when both risk measures are included in the wage equation, only occupational risk is significant. In contrast, there is a negative relation between risk and earnings for white-collar men. This is a puzzling finding, since the use of occupation specific incidence rates reduces the measurement error that may result from imputing industry risk averages to men in safer white-collar occupations. In contrast to the estimates based on gender specific risk measures, estimates based on the BLS industry rate fail to reveal evidence of a compensating differential for job risk faced by women. Imputing this measure of overall industry risk to female workers apparently results in measurement error too great to yield reliable estimates of the wage-risk trade-off for female workers. The wage-risk trade-off and the implicit value of an injury or illness are of a magnitude similar to that found in this study for male blue-collar workers. Since women comprise over 45 percent of the labor force, it is comforting to discover that, at least with regard to job risk, women and blue-collar men face a wage-determination process yielding similar compensation for job risk.