Do progressive marginal income tax rates discourage self-employment? We assume risk neutrality to construct an implicit surtax on stochastic income relative to steady income, arising from a convex tax schedule. It is computed as part of a structural probit model with earnings equations and a tax simulator. The tax convexity variable and the net-of-tax income difference between self- and paid employment have the predicted signs and high levels of statistical significance for the probability of self-employment. A simulated flat tax reform suggests the tax effects are small.

In this article, we measure the impact of on‐site safety inspections on the frequency of work‐related injury and death in the Alberta construction sector, 1987–92. The data are disaggregated by subindustry allowing different risk levels to be associated with different work activities. In our sample, there is a dramatic decrease in inspection activity which alows us to assess the necessity for continuing with current levels of inspection effort. We find that on‐site safety inspections have no effect on the risk of accident and injury but do have a positive effect in reducing the number of work‐related fatalities.