Workplace Injury and Labor Supply within an Organization

In this paper, I study how voluntary labor supply decisions within an organization impact workplace injury using novel data on the payroll and workers’ compensation claims of Los Angeles traffic officers. I use the leave taken by coworkers as an instrument to estimate the causal effect of daily labor supply decisions on workplace injury. Self-selection via voluntary labor supply reduces injuries by 48 percent compared to the underlying injury rate. I decompose selection into a predictable component that could be accomplished via direct assignment on observables by a manager, and a private component known only to the individual worker. I show the vast majority of the effect is driven by the private component, implying decentralized overtime assignment mechanisms like shift auctions are an effective way to reduce organizational injury rates.