The Economic Cost of Fatal Occupational Injuries in the United States, 1980–97

I. INTRODUCTION Despite improvements, workplace hazards continue to plague American workers. Each day an average of 9,000 workers sustain disabling injuries on the job, and 16 die from such injuries. Work-related diseases take the lives of another 137 Americans annually (see National Institute for Occupational Safety and Health [NIOSH], 2000). These figures are alarming in terms of both human suffering and economic losses. According to one team of researchers, these losses accounted for over $155 billion in direct and indirect costs, or 3% of gross domestic product in 1994 (see Leigh et al., 2000). Additionally, they concluded that the annual cost to the American public for losses from occupational injury and illness is more than AIDS, on a par with cancer, and almost as great as all circulatory diseases. The responsibility of NIOSH is to conduct research to promote health and quality of life through prevention and control of work-related disease, injury, and disability. The Division of Safety Research within NIOSH narrows the focus to the study of occupational injury--both fatal and nonfatal. Research directions are determined by a number of methods, including targeting efforts to the highest-risk areas. Traditionally, NIOSH has defined burden in physical terms by focusing on the characteristics and magnitude of injuries and fatalities in the United States, and the mechanisms to prevent or ameliorate those injuries. However, the incidence or magnitude of occupational fatalities in the United States describes only a portion of the burden to the worker, industry, and society. A measure of economic loss associated with the injury or fatality would add a valuable dimension to targeting efforts as well as a tool for assessing cost savings of prevention efforts. This study developed a computerized costing model for calculating cost consequences, which provides a tool for policy makers to systematically examine current and potential research impacts using standard economic measures. It provides comprehensive national estimates for the economic burden of all occupational fatal injuries, which can be incorporated into evaluative tools, such as cost utility, cost effectiveness, cost benefit, and decision analysis to assist in allocating limited resources more effectively. Unlike earlier works (see Rice, 1965; Rice et al., 1989; Leigh et al., 2000), this model uses a bottom-up approach. It estimates the value of an individual fatality based on the key characteristics of that fatality and then sums the individual fatality costs to arrive at the national burden. It provides national and state estimates for the economic burden of selected groups such as specific industries, occupation groups, minority workers, older workers, and teenage workers. The model supports yearly updates, scenario analysis, and the potential for linking to other fatal and nonfatal databases. These estimates provide an additional reliable basis, economic burden, for targeting and evaluating the effectiveness of investments in the prevention of occupational fatalities. II. METHODS A. Theoretical Model For this study, the cost-of-illness theoretical approach was employed. The indirect lifetime cost of an occupational fatal injury is derived by using the human capital approach, calculating the present value of future earnings summed from the year of death until the decedent would have reached age 67, accounting for the probability of survival were it not for the premature death. Mathematically this is represented as follows: (1) PVF = [SIGMA][P.sub.y,q,s](y + 1)[[Y.sub.s,j](n) + [Y.sub.s.sup.h](n)](1 + g)[.sup.n-y]/(1 + r)[.sup.n-y] where PVF = present discounted value of loss due to occupational fatal injury per person; [P.sub.y,q,s](y + 1) = probability that a person of age y, race q, and sex s will survive to age y + 1; y = age of the individual at death; q = race of the individual; s = sex of the individual; j = occupation of individual at death; n = age if the individual had survived; [Y. …