Market versus policy responses to novel occupational risks

The unprecedented occupational risks posed by the COVID-19 pandemic prompted employers to boost wages and federal authorities to propose hazard pay policies. This article estimates a market-based compensating differential for workers facing elevated risks through contact with the public using CPS employment data for 2019–2020 and occupational characteristic data from the US Department of Labor's Occupational Information Network. The estimated premium for exposure was roughly $820 overall and $1000 for essential workers. These premiums fall short of those proposed—but not enacted—by the federal government and are more commensurate with estimates of the value of a statistical life than were the federal proposals.