Where is the market failure? A review of OSHA’s economic analysis for its proposed ergonomics standard

OSHA justifies its proposed regulation on the basis of “market failures in employ-ment and insurance markets. However, the Administration's own analysis demonstrates that about half of the benefits of the proposed regulation accrue directly to industry. It appears that the marginal social costs and marginal private benefits of achieving OSHA's desired level of workplace safety are approximately equal, implying no need for further government intervention. Our analysis demonstrates the following points: • When the total costs and benefits of OSHA's proposed standard are com-pared across all industries, no significant market failure is evident — the benefits to industry are approximately equal to the costs — indicating that government intervention is unnecessary.