Open Access
Subscription Access
Open Access
Subscription Access
Using Value of Statistical Life Approach for Employee’s Compensation
Subscribe/Renew Journal
The method adopted under the Employee Compensation Act, 1923 for paying compensation in case of death of an employee suffers from anomalies which go to the very ischolar_main of the legislation. It uses “loss of dependents” approach and only pays economic damages, ignoring hedonic damages. Therefore, the amount arrived at is inadequate, failing to achieve the objective of welfare legislation and does not generate optimum level of deterrence. Adverse consequences of which are unaccounted externalities and increase in the number of fatal accidents due to suboptimal level of precaution. This paper makes a case study of the construction sector in India to understand these two problems. The alternative which can be adopted is Value of a Statistical Approach which originates from hedonic approach. It measures the value of life in terms of utility derived from life. This method will internalise the social cost and produce an optimum level of deterrence. The paper suggests a framework using VSL approach which can be applied by the courts while paying damages.
Subscription
Login to verify subscription
User
Font Size
Information
- Aldy, Joseph E. and W. Kip Viscusi (2007), Age Differences in the Value of Statistical Life: Revealed Preference Evidence, 1 (Discussion Paper No. 05, Resources for the Future 2007).
- Borjas, George J. (2013), Labor Economics, Sixth Edition, Harvard University, Published by McGraw-Hill, ISBN 978-0-07-352320-0, MHID 0-07-352320-8.
- Devi, P. Indira, K.R. Shanmugam and M.G. Jayasree (2012), Compensating Wages for Occupational Risks of Farm Workers in India, Indian Journal of Agriculture Economics, 67(2): 253-264. http://labourbureaunew.gov.in/UserContent/Report_ECA_2014.pdf?pr_id=qdGbVL476oQ%3D
- https://www.indiastat.com/table/labour-and-workforce-data/380987/wage-rates-for-construction-workers-roads-dams-well-diggers-etc-2013-2018/835473/835474/data.aspx.
- Kausar, Asma and P.S. Varghese (2011), Occupational Deaths at Construction Sites in Bangalore, International Journal of Biomedical and Advance Research, 2(12): 494-497.
- KLEMS India Database on Employment and Productivity, RBI Report, 2017 https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=43504
- Kniesner, Thomas J., W. Kip Viscusi and James P. Ziliak (2014), Willingness to Accept Equals Willingness to Pay for Labor Market Estimates of the Value of a Statistical Life, J. Risk and Uncertainty, 48: 187-205.
- Lee, Jones and Michael W. (1984), The Value of Life: An Economic Analysis, University of Chicago Press (1976), Shepard, Donald S. and Richard J. Zeckhauser, Survival versus Consumption, Management Science, 30(4): 423–439.
- Majumdar, Agamoni and S. Madheswaran (2016), Value of Statistical Life: A Meta-analysis with Mixed Effect Regression Model, Working paper 362, 5.
- Malik, Jyotsna Nath, Workmen’s Compensation Act and Some Problems of Procedure, Indian Institute of Law 132.
- Patel, Dilip Arvindkumar and Kumar Neeraj Jha (2016), An Estimate of Fatal Accidents in Indian Construction, P W Chan and C J Neilson (Eds.) Proceedings of the 32nd Annual ARCOM Conference, 5-7 September 2016, Manchester, UK, Association of Researchers in Construction Management, Vol. 1, p. 543.
- Posner, Richard A. (2011), Economic Analysis of Law, 8th Edition, 249, Aspen Publishers.
- Report on the Working of The Workmen’s Compensation Act, 1923 for the year of 2012, http://labourbureaunew.gov.in/UserContent/Report_ECA_2012_final_New.pdf
- Report on the Working of The Workmen’s Compensation Act, 1923 for the year of 2014.
- Selmer, Knut S. (1970), Interactions between Insurance and Tort Theories in the Norwegian Law of Personal Injuries, The American Journal of Comparative Law, 18(1): 145-168.
- Shanmugam, K.R., Value of Statistical Life, 10 (Dissemination Paper No. 27, Madras School of Economics).
- Stabile, Donald R. (1996), Work and Welfare: The Social Costs of Labour in the History of Economic Thought 3.
- Sunstein, Cass R. and Eric Posner (2004), Dollars and Death, 18 (John M. Olin Program in Law and Economics, Working Paper No. 222).
- Viscusi, W. Kip (1993), The Value of Risks to Life and Health, Journal of Economic Literature, 31(4): 1912-1946.
- ---------- (2005), The Value of Life, 2 (John M. Olin Ctr. For L. Econ and Bus., Harv. L. Sch., Discussion Paper No. 517.
Abstract Views: 469
PDF Views: 0