How injury incidence is associated with business cycles? Empirical evidence from Taiwan

Workplace injury incident rates are commonly reported to change in commensurate with economic situation. Although causal mechanisms, such as new employees, pace of work, and injury reporting behaviors have previously been proposed to explain this phenomenon, there is little empirical evidence supporting this relationship. Using monthly Taiwanese insurance payment data from four main sectors during 2002–2014, this paper examines the relationship by relating major and minor occupational injury to several macroeconomic variables. Regressions based on the first-differenced variables are used to explore how various factors related to the business cycles impact the incidences of major and minor injuries. The analysis is then supplemented with the Granger tests to establish the causality. We conclude that employee fatigue and operational errors that arise from increased working hours and intensified work pace during economic boom times contributed to the injury incidence. In addition, our longitudinal analyses also explain the ways in which firms respond to external demand shocks, thereby further illustrating the mechanism underlying the business cycle and injury incidence.