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Cost‐benefit analysis of investment in occupational health and safety in Colombian companies
Author(s) -
RiañoCasallas Martha I.,
Tompa Emile
Publication year - 2018
Publication title -
american journal of industrial medicine
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.7
H-Index - 104
eISSN - 1097-0274
pISSN - 0271-3586
DOI - 10.1002/ajim.22911
Subject(s) - investment (military) , occupational safety and health , medicine , cost–benefit analysis , work (physics) , actuarial science , occupational medicine , panel data , occupational injury , environmental health , injury prevention , finance , poison control , business , economics , econometrics , engineering , mechanical engineering , ecology , pathology , politics , political science , law , biology
Objective To determine whether investment in preventive measures by a Colombian insurer reduces rates of work‐related injuries and results in positive returns from these investments. Methods The study is based on monthly panel data of 2011‐2015 of 303 medium and large companies affiliated with a private insurer in Colombia. We undertook regression modeling analysis to assess the effectiveness of incremental investments in occupational health and safety (OHS) prevention measures. The cost‐benefit analysis is from the insurer's perspective. Results Investment in OHS per full‐time equivalent was statistically significant at the 1% level. We estimated that 4919 injuries were averted through these investments, resulting in the avoidance of $3 949 957 in costs. Our results suggest that the investments were worth undertaking from the insurer's perspective. Conclusions This paper provides new empirical evidence on the effectiveness and cost‐benefit of OHS investments in a middle‐income country. Incremental investment in OHS can be effective and cost‐beneficial.