The effects of Mine Safety and Health Administration (MSHA) enforcement on the cost of underground coal mining. Final report Sep 80-Oct 81

The study attempts to quantify the impacts of MSHA safety enforcement on labor and capital productivity, and thereby on the cost of underground coal mining. The impact of MSHA enforcement itself is distinguished from that of other variables of a technological, geological, economic, or institutional nature. A two-equation model of coal production was estimated using the method of Least Squares with Dummy Variables, on a sample of quarterly data on 535 underground bituminous coal mines for the period 1976-79. The study found that, at the mean levels of enforcement during 1976-79, the elasticity of both labor and section productivity with respect to enforcement levels was about 0.04. That is, an increase in inspection of 25 per cent would reduce tons produced per section-shift and tons produced per hour worked by about one per cent. MSHA has a 50 per cent greater effect on productivity in nonunion mines than in union mines. Ignoring increased capital costs, the cost of MSHA enforcement averages $52,000 per disabling injury.