Social Trust and Workplace Safety

This paper investigates the impact of social trust on workplace safety. Using the establishment-level data compiled by Occupational Safety and Health Administration (OSHA), we find a negative relation between social trust and workplace injury rates. Our results are robust to removing the influence of regional factors, employing an entropy-balanced sample, and adopting various model specifications and alternative measures of social trust. Further analysis reveals that the documented effect is more pronounced in establishments owned by firms with weaker corporate governance systems, firms in industries with lower union representation, and firms subject to less regulatory scrutiny. Overall, our findings suggest that social trust can serve as an informal governance mechanism for protecting human capital.