Debt, Profitability, and Investment in Workplace Safety

We investigate how a firm's financial performance affects workplace safety. We provide empirical estimates of the relationship between a firm's financial condition and its investment in workplace safety using plant-level proxies for safety performance from OSHA records for thirteen large industries for the period 1972-87. Our results suggest that firms with higher operating margins are safer work places as, in general, are firms with more debt in their capital structure. These results are consistent with a number of theoretical models in which financial factors influence operating decisions