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NIOSH Fatal Occupational Injury Cost Fact Sheet: Manufacturing

September 2006
DHHS (NIOSH) Publication Number 2006-154
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Fatal Occupational Injury Cost Model

Theoretical Basis of Cost Estimation

The cost to society of a workplace fatality was estimated using the cost-of-illness approach, which combines direct and indirect costs to yield an overall cost of an occupational fatal injury. For these calculations, only medical expenses were used to estimate the direct cost associated with the fatality. The indirect cost was derived by calculating the present value of future earnings summed from the year of death until the decedent would have reached age 67, accounting for the probability of survival were it not for the premature death. (For more information, see Biddle, E [2004]. @@!--PLACEHOLDER:f15ca18867684a2ae666db2ff97ebdbe19429122--@@. Contemporary Economic Policy 22(3):370–381.)

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Data Sources

Fatality data: @@!--PLACEHOLDER:801d21a5118a1031c6672aa5d56224debfd21b2b--@@. These data exclude military personnel, decedents with unknown age or sex, fatalities occurring in New York City, and fatalities from the September 11, 2001, terrorist attacks.

Probability of survival: @@!--PLACEHOLDER:22c41cc0847d51a2e253b9e8ed0a9f66010834c--@@.

Median annual earnings: @@!--PLACEHOLDER:70586c61f8d20f7256446e6d01b4d4761c670--@@. Wage data are based on the occupation of the decedent and the year of death adjusted by @@!--PLACEHOLDER:19ce6cde1378ba3f81d795ce6bc0f43ecd4bb0da--@@ to base year of dollar. Life-cycle wage growth was calculated based on the rate of change in wages between age groups.

Benefits: @@!--PLACEHOLDER:18dcf588657697cedc9032f9d49227528399d1--@@. Benefits data are based on the industry where the decedent was employed and the year of death adjusted by the GDP Deflator.

Mean annual home production: @@!--PLACEHOLDER:27c7a0b728b1d57629e828a3b24bffeda8d17d2--@@ that were derived by a time diary study sponsored by the U.S. Environmental Protection Agency and conducted by the University of Maryland.

Wage growth rate: Based on @@!--PLACEHOLDER:a38a73498cdaf3706154a916e7a876f8ba5425a--@@

Medical costs: @@!--PLACEHOLDER:a5ce533f410722121e94e578ce5223f8ac837--@@. Costs are a 3-year average cost.

Employment estimates for rate calculations: @@!--PLACEHOLDER:70586c61f8d20f7256446e6d01b4d4761c670--@@.

Fatality Rate Calculations

Fatality rates were calculated by NIOSH and may differ from previously published BLS CFOI rates. Fatality rates were calculated as deaths per 100,000 workers. Fatality rates for sex, race, age group, and occupation were calculated using employment estimates by the individual characteristic within the specific industry sector. Employment estimates for the specific industry sector were used to generate rates for event.

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