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Returning to Work from Injury: Longitudinal Evidence on Employment and Earnings

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  • Sarah Crichton
  • Steven Stillman
  • Dean Hyslop

Abstract

New Zealand has a unique accident insurance system that pays the direct costs of all injuries and compensates workers up to 80% of their earnings for any time that they are unable to work. To estimate the effect of injuries on labor market outcomes, the authors use Statistics New Zealand's Linked Employer-Employee Database (LEED) covering the period April 1999 to March 2004 using a difference-in-differences matching approach. They use two alternative matching criteria to construct control groups of non-injured workers whose pre-injury characteristics are similar to those of injured workers: the first uses only characteristics of the workers whereas the second exploits the nature of the LEED and matches workers in the same firm. Findings indicate that injuries resulting in more than three months of earnings compensation have negative effects on future labor market outcomes that do not decline with time post-injury. The results are broadly similar using both matching criteria, providing more validity to the authors' findings.

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Bibliographic Info

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

Volume (Year): 64 (2011)
Issue (Month): 4 (July)
Pages: 765-785

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Handle: RePEc:ilr:articl:v:64:y:2011:i:4:p:765-785

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References

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  1. Alan B. Krueger, 1990. "Incentive Effects of Workers' Compensation Insurance," NBER Working Papers 3089, National Bureau of Economic Research, Inc.
  2. Leslie I. Boden & Monica Galizzi, 2003. "Income Losses of Women and Men Injured at Work," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
  3. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  4. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 65(2), pages 261-94, April.
  5. Robert T. Reville & Robert F. Schoeni, 2001. "Disability from Injuries at Work: The Effects on Earnings and Employment," Working Papers, RAND Corporation Publications Department 01-08, RAND Corporation Publications Department.
  6. Meyer, Bruce D & Viscusi, W Kip & Durbin, David L, 1995. "Workers' Compensation and Injury Duration: Evidence from a Natural Experiment," American Economic Review, American Economic Association, vol. 85(3), pages 322-40, June.
  7. repec:fth:prinin:349 is not listed on IDEAS
  8. Alan Krueger & Douglas Kruse, 1995. "Labor Market Effects of Spinal Cord Injuries in the Dawn of the Computer Age," NBER Working Papers 5302, National Bureau of Economic Research, Inc.
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Cited by:
  1. McAllister, Susan & Derrett, Sarah & Audas, Rick & Herbison, Peter & Paul, Charlotte, 2013. "Do different types of financial support after illness or injury affect socio-economic outcomes? A natural experiment in New Zealand," Social Science & Medicine, Elsevier, vol. 85(C), pages 93-102.
  2. K A Bender & C Green & J S Heywood, 2010. "Piece Rates and Workplace Injury: Does Survey Evidence Support Adam Smith?," Working Papers 609288, Lancaster University Management School, Economics Department.
  3. Emmanuel Duguet & Chr. Le Clainche, 2014. "The Effect of Non-Work Related Health Events on Career Outcomes: An Evaluation in the French Labor Market," Working Papers halshs-00674553, HAL.
  4. Halla, Martin & Zweim├╝ller, Martina, 2013. "The effect of health on earnings: Quasi-experimental evidence from commuting accidents," Labour Economics, Elsevier, vol. 24(C), pages 23-38.
  5. Pouliakas, Konstantinos & Theodossiou, Ioannis, 2010. "An Inquiry into the Theory, Causes and Consequences of Monitoring Indicators of Health and Safety at Work," IZA Discussion Papers 4734, Institute for the Study of Labor (IZA).
  6. Emmanuel Duguet & Christine le Clainche, 2012. "Chronic Illnesses and Injuries: An Evaluation of their Impact on Occupation and Revenues," Working Papers, LAMETA, Universtiy of Montpellier 12-02, LAMETA, Universtiy of Montpellier, revised Jan 2012.

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