When Justice Meets Safety: How a Supreme Court Ruling Transformed Workplace Safety

Abstract Occupational accidents impose devastating human and economic costs worldwide, yet evidence on how judicial decisions affect workplace safety remains scarce. This study provides the first causal evidence on this relationship by examining Argentina’s landmark Aquino ruling (2004), which eliminated employers’ exemption from civil liability for workplace accidents. Using an event study design with provincial panel data (1997–2021), we exploit the differential impact of increased employer liability on workplace accidents versus commuting accidents ( in itinere ) as our identification strategy. Results show that workplace accidents decreased significantly by 16–27% following the judicial decision, with larger reductions in provinces with higher initial number of accidents. Importantly, we find no evidence of moral hazard effects when examining accidents that are difficult to detect and verify. The findings demonstrate that judicial decisions creating immediate economic liability can generate substantial behavioral responses even in developing country contexts with limited enforcement capacity, suggesting that liability-based approaches may effectively complement traditional regulatory strategies for improving workplace safety.