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The influence of workers' compensation on safety incentives

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  • James R. Chelius
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    Abstract

    This study examines the impact of workers' compensation benefits on the allocation of resources to injury prevention, using unpublished data from OSHA on injury rates in manufacturing industries within 36 states. The analysis shows that higher compensation benefits are associated with lower severity rates of injury, suggesting that higher benefits induce employers to spend more on the prevention of serious injuries. On the other hand, higher benefits are also associated with higher frequency rates of injury, suggesting that higher benefits induce employees to take less care in preventing less serious injuries. The author suggests ways of resolving this dilemma and stresses that his findings show that decisions about the structure of workers' compensation laws should not be based solely on income security considerations, as they often are. (Abstract courtesy JSTOR.)

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    Bibliographic Info

    Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

    Volume (Year): 35 (1982)
    Issue (Month): 2 (January)
    Pages: 235-242

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    Handle: RePEc:ilr:articl:v:35:y:1982:i:2:p:235-242

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    Cited by:
    1. Kaestner, Robert & Grossman, Michael, 1998. "The effect of drug use on workplace accidents," Labour Economics, Elsevier, vol. 5(3), pages 267-294, September.
    2. Fortin, Bernard & Lanoie, Paul, 1998. "Effects of Workers' Compensation: A Survey," Cahiers de recherche 9816, Université Laval - Département d'économique.
    3. David Card & Brian P. McCall, 1996. "Is Workers' Compensation covering uninsured medical costs? Evidence from the "Monday effect."," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 49(4), pages 690-706, July.
    4. Krueger, Alan B. & Meyer, Bruce D., 2002. "Labor supply effects of social insurance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 33, pages 2327-2392 Elsevier.
    5. Ronald G. Ehrenberg, 1985. "Workers' Compensation, Wages, and the Risk of Injury," NBER Working Papers 1538, National Bureau of Economic Research, Inc.
    6. Zimmermann, Klaus F. & Rotte, Ralph & Bauer, Thomas K. & Million, Andreas, 1998. "Immigration Labor and Workplace Safety," IZA Discussion Papers 16, Institute for the Study of Labor (IZA).

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