Cover: Small Businesses and Workplace Fatality Risk

Small Businesses and Workplace Fatality Risk

An Exploratory Analysis

Published Apr 20, 2006

by John Mendeloff, Christopher Nelson, Kilkon Ko, Amelia Haviland

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Over 55 percent of Americans are employed in businesses with fewer than 100 workers. Policymakers have taken action to lessen regulatory burden on small business. However, evidence shows that small establishments-single physical locations-have much higher rates of deaths or serious injuries than do larger establishments. This study examined the relationship between fatality rate and business size, both in terms of establishment size and firm size, from 1992 to 2001. The analysis uses fatality data drawn from Occupational Safety and Health Administration (OSHA) accident investigation reports and employment data from the U.S. Department of Commerce and the U.S. Census Bureau. The study found the following: (1) The smallest establishments had the highest fatality rates. (2) Within firms of a given size, fatality risk still declines steadily with larger establishment size, but if one controls for establishment size, firm size has little impact on risk. (3) In small establishments, there is some protective value in being a small firm. (4) Higher fatality rates in small businesses are related to OSHA violations. (5) Electrocutions are slightly more common in small establishments. (6) Fatality rates at small establishments declined slightly over time. (7) Nonmetropolitan location and unionization were both associated with higher establishment fatality rates.

The research described in this report was conducted within the RAND Institute for Civil Justice under the auspices of the Kauffman-RAND Center for the Study of Small Business and Regulation. This research was supported by the Ewing Marion Kauffman Foundation.

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