An Investigation into the Statistical Significance of Labor Force Longevity in Brick Kilns and Marble Industry: A Case Study of Peshawar

Abstract

Government agencies and policy makers are increasingly tasked with the imperative of implementing health and safety regulations. A crucial concern for them lies in determining the quantifiable value of the benefits stemming from these safety regulations. This entails ascertaining the measurable worth attributed to the reduction of mortality and health risks. This complex endeavor is rooted in the nuanced understanding of how individuals financially indemnify themselves for the hazards they willingly undertake. This analytical framework is commonly known as the compensating wage differentials method. This method entails the estimation of a wage premium that a worker necessitates in order to assume a marginal escalation in the likelihood of mortality or injury. Similarly, it explores the monetary amount a worker would be willing to expend to curtail the hazards to their health and life, or to secure a marginal enhancement in their personal safety. The derivation of the wage premium emanates from the dynamic interplay within the labor market and the calculation of the value of statistical life—a metric that encapsulates the financial quantum a population is willing to disburse to avert a solitary fatality within their cohort. This research endeavor undertakes the estimation of the value of statistical life and injury for laborers engaged in brick kilns and the marble industry within the locale of Peshawar, Khyber Pakhtunkhwa. The foundation of this valuation rests upon the compensating wage differential approach. The sample size for this study comprises 200 individuals, encompassing both internationally recognized annual work hours as well as those pertinent to the Pakistani context. In the context of 2000 annual work hours, the computed Value of Statistical Life (VSL) for marble industry workers amounts to PKR 54.6 million (USD 0.3412 million), accompanied by a perceived injury valuation of PKR 5460. Concomitantly, for brick kiln laborers, the VSL is estimated at PKR 43.7 million (USD 0.2731 million). Upon transitioning to the annual work hours applicable within Pakistan (2800), the VSL for marble industry workers escalates to PKR 76.44 million (USD 0.4777 million), accompanied by a corresponding perceived injury valuation of PKR 7644. Analogously, for brick kiln workers, the VSL is projected to be PKR 61.18 million (USD 0.3823 million). In summation, this study contributes to the quantification of the intricate interplay between occupational risks, wages, and the broader notion of human life's monetary value. The estimations achieved herein serve as pertinent inputs for policy formulation, resource allocation, and decision-making processes, equipping stakeholders with empirical insights into the tangible worth attributed to health and safety enhancements within the brick kiln and marble industries.