Why will active government policy to increase workplace safety reduce overall welfare?

Question

Quizplus · Accepted Answer

The hedonic wage model assumes that in a competitive market, there is an efficient level of workplace safety that maximizes the overall utility of workers. This means that if the government tries to increase workplace safety beyond this level, it will come at a cost to the overall welfare because it will reduce the profits of firms and increase the cost of labor. This could lead to firms cutting back on hiring or reducing wages, which would decrease the overall welfare of workers. Therefore, pursuing an active government policy to increase workplace safety beyond the efficient level would not be beneficial.

Why Will Active Government Policy to Increase Workplace Safety Reduce