11th Market Economy Colloquium: Assessing the Effects of the Occupational Safety and Health Act and the Serious Accidents Punish

11th Market Economy Colloquium

Date and Time: 11:00 a.m., January 16, 2026

Venue: Pureun Hall

Topic: Assessing the Effects of the Enforcement of the Occupational Safety and Health Act and the Serious Accidents Punishment Act

Presentation: Giman Kim, Secretary General of the Citizens Forum for Better Regulation

Discussion: Iseok Kim, President of the Institute for Market Economy Systems; Hyukchul Kwon, President of the Institute for Market Economy Systems; Jaewook Ahn, Professor Emeritus at Kyung Hee University; Sung-no Choi, President of the Center for Free Enterprise (CFE); Yun Seol, Professor at Kyungpook National University; Yoonseok Jeong, Professor at Myongji College; Gwang yong Go, Policy Director of the Center for Free Enterprise (CFE); and four others

Assessing the Effects of the Enforcement of the Occupational Safety and Health Act and the Serious Accidents Punishment Act (Narrative Summary)

Giman Kim, Secretary General of the Citizens Forum for Better Regulation

Industrial accidents refer to cases in which workers suffer death, injury, or illness due to exposure to hazardous factors such as equipment, raw materials, gas, and dust in the course of work, or due to accidents occurring while performing their duties. A key indicator widely used to assess the performance of industrial safety policy is the fatality rate per 10,000 workers. In Korea, labor conditions were designed largely from the employer’s perspective during the industrialization process, and disaster risks accumulated over time. The legal system then developed in a way that strengthened regulation each time a major industrial accident occurred. After the 1987 Wonjin Rayon incident, the Occupational Safety and Health Act was fully revised, and following the 2019 death of Kim Yong-gyun, the issue of the “outsourcing of risk” came to the fore, leading to another expansion of regulations, including restrictions on subcontracting and stronger responsibility for principal contractors. Then, in 2021, amid the view that the existing Occupational Safety and Health Act alone had limitations in preventing accidents, the Serious Accidents Punishment Act was enacted and took effect in 2022.

This presentation aims to empirically examine how the full revision of the Occupational Safety and Health Act in 2020 and the enforcement of the Serious Accidents Punishment Act in 2022 actually affected corporate industrial accident rates. As its analytical method, it uses the difference-in-differences (DiD) approach, which is often employed to estimate policy effects. Workplaces with 50 or more, 100 or more, and 300 or more employees—those subject to the law—were set as the treatment groups, while small workplaces excluded from application or granted a grace period were set as the control group, in order to estimate the net effect of the policy change on the injury rate.

The results differ from intuitive expectations. After the 2020 revision of the Occupational Safety and Health Act, injury rates at firms subject to the law rose by a statistically significant amount, and after the promulgation of the Serious Accidents Punishment Act in 2021 (during the pre-enforcement preparation period), an upward trend in injury rates was also identified at workplaces with 50 or more employees. In particular, after the law took effect in 2022, injury rates at large firms with 50 or more, 100 or more, and 300 or more employees increased more clearly than at small firms. The presentation suggests that this should be interpreted not as the policy having made workplaces more dangerous, but rather as a change in the way accidents are revealed.

The presentation’s core conclusion is the so-called “paradox of regulation (formalization of reporting).” In other words, as the risk of punishment increased, large firms strengthened compliance systems that recorded and reported even minor injuries rather than hiding accidents. As a result, accidents that had previously not appeared in the statistics became visible in the numbers, making it seem as though the injury rate had risen. By contrast, fatal accidents are inherently difficult to conceal, so the data are more accurate, and in fact no major change in the fatality rate was identified before and after the law’s enforcement. This supports the message that “the Serious Accidents Punishment Act had limits in immediately reducing the actual risk of fatal accidents at worksites” (see the related graph on page 16).

The presentation also points out that stronger regulation can produce a “balloon effect.” While reporting by large firms approaches nearly 100 percent, pushing their statistical injury rates upward, smaller workplaces, which face relatively less regulatory pressure, still have an incentive not to report minor accidents, thereby widening the gap between the two groups. Ultimately, it becomes important to recognize that the figures alone do not justify concluding that the policy failed, and that a rise in accident statistics does not necessarily mean an increase in actual risk.

Finally, the presentation criticizes the structural limitations of Korea’s industrial safety legal framework. It argues that industrial safety regulations have been designed around externally imposed controls to the point of encompassing 1,220 provisions, and that the repeated practice of adding more clauses whenever an accident occurs has made risk assessment a mere formality in the field, even pushing small and medium-sized enterprises to the point of giving up on safety management itself. In particular, since the enforcement of the Serious Accidents Punishment Act, firms have tended to focus less on investing in their own safety capabilities and more on “avoiding punishment,” such as by seeking law-firm advisory services. It also notes the continuing problems of overlapping regulation and double punishment resulting from overlapping laws. The presentation thus concludes that punishment-centered regulation has structural limits in producing preventive effects.

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Original title: 제11회: 산업안전보건법 및 중대재해처벌법 시행효과 확인

Author: Market Economy Colloquium

Date: 2026-01-16

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=collo&pn=1&idx=28507