Abstract
The aim of this paper is to analyse the relationship between the wage level and job-related fatal risks. Our research confirms a statistically significant effect of occupational fatal risk on employees? wages.
The VSL obtained from industry performance indicators ranges between EUR 3.4 and 4.3 million. The VSL obtained from the wage differentials estimated from 2006 survey data is about EUR 6 million, while the VSL is even higher for those exposed to fatal risks in their jobs.
We arrive at similar results if the VSL is estimated from the 2000 survey dataset. We do not, however, confirm any statistically significant effect of fatal job risks on wages for all industries and employees.
We support the notion that risk endogeneity and unobserved heterogeinty need to be treated properly in any wage model estimation. Moreover, our results confirm that the choice of a specific functional form of the hedonic wage model might affect the hedonic differential and the VSL so estimated.