Labor law and workplace injuries

This paper studies the effect of the Law of Employer Criminal Liability in Uruguay, which criminalizes workplace safety violations. Using detailed data on reported workplace injuries, we employ a Regression Discontinuity in Time design to identify the causal effect of the law. Following the adoption of the law, Uruguay experienced a significant 23 % reduction in reported workplace injuries, with the most pronounced reduction occurring in the industrial and primary sectors. We attribute these results to the law's deterrent effect rather than to increased prosecutions, as only two employers were convicted under the new legislation. Our findings demonstrate the potential of punitive approaches to enhance workplace safety even in contexts where proactive enforcement is challenging or costly. In addition, they show that laws establishing greater employer liability can significantly reduce injuries without imposing additional administrative burdens.