The Value of Statistical Life and Quantification of Labor Market Frictions

If a government intervention changes mortality risk, it is common to express benefits monetarily by multiplying avoided fatalities by an estimate of the value of statistical life. The VSL literature has further potential use—to offer evidence on labor market frictions and thus the mortality-related distortion that a government occupational-safety intervention could address. This paper newly presents this evidence as an off-the-shelf tool for bounding costs and net benefits, akin to the tool that VSL itself has become for monetizing benefits. Labor market frictions have additional relevance for welfare analysis of government interventions, and this paper’s VSL extrapolations also include robustness checks on existing estimates of the cost to workers of employment disruptions.