Working Paper: NBER ID: w1538
Authors: Ronald G. Ehrenberg
Abstract: This paper provides an analysis and summary of the effects of the Workers' Compensation (WC) system on wages and work injury experience. It stresses how lessons learned from other forms of social insurance can be applied to research on WC. I begin with a brief overview of the characteristics of the WC system. Next, some simple labor market models are sketched that provide implications about how the system might affect employee compensation and the frequency and duration of both work injuries and reported WC claims.The bilk of the paper critically analyzes the relevant empirical literature, summarizing what we have learned from it and suggesting future research directions.
Keywords: workers compensation; wages; risk of injury
JEL Codes: J32; J08
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher WC benefits (I38) | Increased frequency of injuries (J28) |
| Higher WC benefits (I38) | Reduced workers' precautionary measures (J28) |
| Reduced workers' precautionary measures (J28) | Increased frequency of injuries (J28) |
| Higher WC benefits (I38) | Increased claim filing (G52) |
| Higher WC benefits (I38) | Longer claim durations (C41) |
| Income replacement rates (H55) | Longer claim durations (C41) |
| Experience rating (G22) | Moderates relationship between WC benefits and injury rates (J28) |