Safety and Health of Contract Workers in Japan’s Nuclear Utility Industry

We present a theoretical explanation for the intuitive proposition that the occupational safety conditions of on-site contract workers (employees of contracting firms) and employees (employees of host companies) are likely to differ. We derive ordinary imperfect information models from a review of regulations governing Japan’s nuclear utility industry. The models imply that hiring contract workers enables nuclear utilities to implement lower standards of occupational safety and health than those imposed by regulations, and reduce costs by circumventing responsibilities legally imposed on employers. Using measurements of nuclear plant workers’ exposure to radiation, we show that occupational safety and health conditions differ among plants governed by the identical regulations.