Working Paper: NBER ID: w26980
Authors: Andy Yuan; Price V. Fishback
Abstract: Nearly every state has amended workers’ compensation laws in the last two decades and the national averages of cash and medical benefits paid per covered worker have declined. As a result, writers have suggested that the states might be cutting back on workers’ compensation benefits. We show that measures of the statutory benefits have been rising over time, a trend that work against the declining trend in average payouts per covered worker. A decline in accident rates at the national level has contributed to the decline in payouts. We then investigate the impact of specific state laws related to burdens of proof and limits on medical coverage after developing an annual panel data set for all states between 1997 and 2016. The results show that state laws that ban liberal construction of the rules and apportion benefits based on pre-existing conditions contribute to sharp declines in the states where they are enacted.
Keywords: Workers Compensation; Burdens of Proof; State Laws
JEL Codes: J32; J38; K31; K4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| laws prohibiting liberal construction (K10) | cash benefits per covered worker (J32) |
| laws prohibiting liberal construction (K10) | medical benefits per covered worker (J32) |
| laws presuming intoxication as proximate cause (K13) | cash benefits per covered worker (J32) |
| laws presuming intoxication as proximate cause (K13) | medical benefits per covered worker (J32) |
| apportionment laws based on preexisting conditions (J18) | cash benefits per covered worker (J32) |
| apportionment laws based on preexisting conditions (J18) | medical benefits per covered worker (J32) |
| medical fee schedule laws (I18) | cash benefits per covered worker (J32) |
| medical fee schedule laws (I18) | medical benefits per covered worker (J32) |
| physician network laws (J44) | cash benefits per covered worker (J32) |
| physician network laws (J44) | medical benefits per covered worker (J32) |