한국생산성학회

This paper analyzes the effect of education and training investment on occupational injury and illness incidence rates (hereafter, injury and illness rates). The acquisition of specific skills from education and training induces a firm to invest to make the safer place. A model is developed to consider a working place in which the equilibrium level of injury and illness rates is endogenously determined by the marginal cost and benefits of controlling injury and illness rates. It tries to identify the determinants of production disruption costs, which grow up with the rate of in-firm education and training investment as well as the efficiency of the education and training investment. The analysis also considers how the equilibrium level of injury and illness rates is adjusted to the culture of the firm such as the labor-management relation and the sharing index of performance with employees. According to the results of the model, the injury risk that a firm selects at workplace is negatively related to the rate of in-firm education and training investment. The equilibrium level of injury and illness rates is lower: the more efficient is in-firm education and training investment, the higher the sharing index of performance with employees, the more cooperative the labor-management relation, the lower the proportion of irregular workers. The empirical results confirm the proposition that the increase in the rate of in-firm education and training investment lowers the level of injury rates. To solve endogeneity problem, 2SLS using instrumental variable is used. This analysis has three important implications. First, it gives some support to the wisdom that the wealth effect exists even for the firm in the sense that the injury risk that a firm selects at workplace is negatively related to the rate of education and training investment. Second, most of the previous analysis of education and training on the financial performance of the firm underestimate the effect of education and training on financial performance. They ignored the reduced accident cost including disruption production cost with compensating wage differentials due to the reduction of the injury and illness rate resulting from the increase in the rate of education and training investment. Third, current safety policies have failed to grasp the effect of education and training investment on occupational injury and illness incidence rates. The issues of in-firm education and training and innovation fall outside the scope of the safety policies. The best safety policies should embrace a broad range of policies such as in-firm education and training and innovation of the firm.