Do standardised workplace health and safety laws and increased enforcement activities reduce the probability of receiving workers' compensation?

We estimated the impact of standardising workplace health and safety (WHS) laws and increasing enforcement activities in Australia on the probability of receiving workers' compensation. Standardised WHS laws were introduced in all but two Australian states over 2012-2013, creating a unique natural experiment. We exploited this jurisdictional variation to perform difference-in-difference estimation on a sample of workers from the Household, Income and Labour Dynamics in Australia survey. We found standardising WHS laws and increasing enforcement activities reduced the probability of receiving workers' compensation by 0.9 percentage points (p=0.047). Subgroup analysis suggests the probability of receiving workers' compensation declined by 2.9-3.6 percentage points (p=0.030) in the high-risk construction industry. The larger impact in construction may have resulted from more opportunities to reduce workplace risk and changes to laws specifically targeted at this industry. Our estimation results suggest reduced workers' compensation claims resulted from reduced injuries, supported by injury reduction trends and increased enforcement activity in national datasets. However, we cannot rule out that some policy effect component may also reflect employers discouraging claims due to stricter WHS requirements and higher non-compliance penalties.