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Workers' Compensation and Injury Duration: Evidence from a Natural Experiment

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  • Meyer, Bruce D
  • Viscusi, W Kip
  • Durbin, David L

Abstract

This paper examines the effect of workers' compensation on time out of work. It introduces a 'natural experiment' approach of comparing individuals injured before and after increases in the maximum weekly benefit amount. The increases examined in Kentucky and Michigan raised the benefit amount for high-earnings individuals by approximately 50 percent, while low-earnings individuals, who were unaffected by the benefit maximum, did not experience a change in their incentives. Time out of work increased for those eligible for the higher benefits and remained unchanged for those whose benefits were constant. The estimated duration elasticities are clustered around 0.3-0.4. Copyright 1995 by American Economic Association.

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 85 (1995)
Issue (Month): 3 (June)
Pages: 322-40

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Handle: RePEc:aea:aecrev:v:85:y:1995:i:3:p:322-40

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  1. Ronald G. Ehrenberg, 1985. "Workers' Compensation, Wages, and the Risk of Injury," NBER Working Papers 1538, National Bureau of Economic Research, Inc.
  2. Alan B. Krueger, 1990. "Workers' Compensation Insurance and the Duration of Workplace Injuries," NBER Working Papers 3253, National Bureau of Economic Research, Inc.
  3. Bruce D. Meyer, 1989. "A Quasi-Experimental Approach to the Effects of Unemployment Insurance," NBER Working Papers 3159, National Bureau of Economic Research, Inc.
  4. Krueger, Alan B., 1990. "Incentive effects of workers' compensation insurance," Journal of Public Economics, Elsevier, vol. 41(1), pages 73-99, February.
  5. repec:fth:prinin:261 is not listed on IDEAS
  6. Butler, Richard J & Worrall, John D, 1983. "Workers' Compensation: Benefit and Injury Claims Rates in the Seventies," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 580-89, November.
  7. Finis Welch, 1977. "What have we learned from empirical studies of unemployment insurance?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 30(4), pages 451-461, July.
  8. Butler, Richard J & Worrall, John D, 1985. "Work Injury Compensation and the Duration of Nonwork Spells," Economic Journal, Royal Economic Society, vol. 95(379), pages 714-24, September.
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