Multinational Enforcement of Labor Law: Experimental Evidence on Strengthening Occupational Safety and Health Committees

Abstract

Annually, work‐related mortality is responsible for 5–7% of all global deaths, and at least 1‐in‐9 workers experience nonfatal occupational accidents (ILO (2019a,b)). Occupational Safety and Health (OSH) committees are considered the key worker voice institution through which to improve workplace safety and health (ILO (1981)). I present evidence of OSH committees' causal effects on workers and on factories. To do so, I collaborated with 29 multinational apparel buyers that committed to enforce a local mandate for OSH committees on their suppliers in Bangladesh. With the buyers, I implemented a nearly year‐long field experiment with 84 supplier factories, randomly enforcing the mandate on half. The buyers' intervention increased compliance with the OSH committee law. Exploiting the experimental variation in OSH committees' strength, I find that stronger OSH committees had small, positive effects on objective measures of safety. These improvements did not come at a cost to workers in terms of wages or employment or to factories in terms of labor productivity. The effects on compliance, safety, and voice were largest for factories with better managerial practices. Factories with worse practices did not improve, and workers in these factories reported lower job satisfaction; this finding suggests complementarity between external enforcement and internal capacity in determining the efficacy of regulation.