Do Safety Management System Standards Indicate Safer Operations? Evidence from the OHSAS 18001 Occupational Health and Safety Standard

Problem definition: In light of the enormous disruptions and costs associated with occupational injuries, companies and buyers are increasingly looking to voluntary occupational health and safety standards to improve worker safety. Yet because these standards require only the implementation of certain processes and procedures, it is largely unknown whether such certification actually conveys superior safety performance. We examine this relationship in the context of the OHSAS 18001 Occupational Health and Safety Management system standard. Methodology/results: We analyze proprietary certification data from some of the world’s largest certification bodies and establishment-level injury data from the U.S. Bureau of Labor Statistics over the period of 1995 to 2016, and find that U.S. establishments certified to the OHSAS 18001 standard indeed tend to be safer workplaces. The OHSAS 18001 standard attracts establishments with fewer injury and illness cases than comparable establishments (a selection effect). Using propensity score matching and a difference-in-differences approach, we estimate that OHSAS 18001 certification reduces the total number of illness and injury cases by 20 percent and the number of illness and injury cases associated with job transfers or restrictions by 24 percent. Managerial implications: Our results indicate that becoming certified to a safety management standard can lead to meaningful improvements in workplace safety—a particularly important insight for managers given the enormous costs that occupational injuries impose on companies. We also find that OHSAS 18001 certification is a credible indicator of superior average safety performance, a key insight for buyers interested in procuring from safer workplaces and regulators determining where to allocate scarce inspection resources. Given that OHSAS 18001 is the basis for the new ISO 45001 Occupational Health and Safety Management Systems standard, which has quickly become the world’s third-most popular management system standard, this study provides promising evidence that this new standard will also prove effective in distinguishing safer workplaces.