No . 2012 - 02 Regulatory Enforcement , Politics , and Institutional Distance : OSHA Inspections 1990 - 2010

Using a dataset of over 1.6 million inspections by the Occupational Safety and Health Agency (OSHA) from 1990 through 2010, we explore the determinants of inspection and enforcement outcomes. OSHA is an institutionally split agency, with the federal agency conducting inspections in 25 states and state agencies conducting inspections in the remaining 25. The geographic variety and range over 21 years allows investigation into the institutional and political determinants of inspection outcomes, with particular attention to the fines levied by inspectors and the ability of firms to negotiate reductions in fines levied upon them. We find patterns of discretionary enforcement that are distinctly different in state and federally conducted inspections. State agencies are considerably more sensitive to local economic conditions than their federal counterparts, finding fewer standard violations and fewer serious violations as unemployment increases. Larger companies receive greater lenience on behalf of inspectors in multiple dimensions. The executive branch exerts greater influence than congress over inspection outcomes in both federal and state agencies. Inspector issued fines and final fines, after negotiated reductions, are both smaller during Republican presidencies. Quantile regression analysis reveals that the party of the president has its greatest impact on both the largest fines issues and the largest negotiated reductions in fines. JEL Codes: K23, H73, I18