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What Are Workers Willing to Pay for Safe Work?

Health & Psychology Bangladesh
Workers in Bangladeshi Factory. Credit: Laura Boudreau

Poor workers in developing countries generally work in harsh and often unsafe conditions. These conditions can have adverse health, cognitive, and psychological impacts on workers that contribute to keeping them and their families in poverty (Blattman and Dercon, 2017). In Bangladesh’s ready-made garment (RMG) sector, the effects of poor working conditions are readily apparent. Bangladesh received extensive international attention following the 2013 Rana Plaza building collapse that killed 1,150 garment workers and injured thousands of others. A key question is the extent to which workers are aware of workplace risks, and if they are not aware of certain risks, how information about these risks would influence their employment decisions. In this randomized controlled trial, I first show that garment workers do not perceive how risky their workplace is, as measured by objective building safety audits. I then randomly provide information about their factories’ safety from the audits. I study the effects on workers’ decisions about where to work as well as their reported levels of workplace-related perceived risks, stress, and trust. The findings will have important health and labor policy implications for developing countries. If improved information about factory safety affects workers’ decisions about where to work and/or where to refer family and friends to work, it would suggest that governments, entrepreneurs, or non-governmental organizations in developing countries have a role to play in addressing this market failure. Results forthcoming.

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