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Workers' Compensation Insurance, Experience-Rating, and Occupational Injuries

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Author Info
John W. Ruser

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Abstract

This article examines how an increase in workers' compensation indemnity benefits affects injury rates when firms are experience-rated to varying degrees. The theoretical model shows that an increase in benefits has a smaller effect on injury rates in more highly experience-rated firms. Since an institutional characteristic of workers' compensation insurance is that larger firms tend to be more highly experience-rated, the empirically testable hypothesis is that there is a smaller relationship between benefits and injury rates in larger firms. The hypothesis is tested with injury rate regressions estimated by using data on 25 three-digit U.S. manufacturing industries for the years 1972-1979. Support for the hypothesis is found when the frequency of all injuries is the dependent variable, but the evidence for the hypothesis is less strong when the dependent variable is the frequency of lost-workday injuries.

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File URL: http://links.jstor.org/sici?sici=0741-6261%28198524%2916%3A4%3C487%3AWCIEAO%3E2.0.CO%3B2-9&origin=repec
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Publisher Info
Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 16 (1985)
Issue (Month): 4 (Winter)
Pages: 487-503
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Handle: RePEc:rje:randje:v:16:y:1985:i:winter:p:487-503

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  1. Denis Bolduc & Bernard Fortin & France Labrecque & Paul Lanoie, 1997. "Incentive Effects of Public Insurance Programs on the Occurence and the Composition of Workplace Injuries," CIRANO Working Papers 97s-24, CIRANO. [Downloadable!]
  2. Xiangdong Wei* & Steve Russell** & Robert Sandy**, 2005. "Analysing workplace safety policies in hong kong with a simulation method," International Economic Journal, Korean International Economic Association, vol. 19(2), pages 321-353, June. [Downloadable!] (restricted)
  3. Bernard Fortin & Paul Lanoie, 1998. "Effects of Workers' Compensation: A Survey," CIRANO Working Papers 98s-04, CIRANO. [Downloadable!]
    Other versions:
  4. Alan B. Krueger, 1990. "Incentive Effects of Workers' Compensation Insurance," NBER Working Papers 3089, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Alan Krueger, 1988. "Moral Hazard in Workers' Compensation," Working Papers 619, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  6. Dhaval Dave & Robert Kaestner, 2006. "Health Insurance and Ex Ante Moral Hazard: Evidence from Medicare," NBER Working Papers 12764, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Thomas J. Kniesner & John D. Leeth, 2000. "Workplace Safety Policy: Past, Present, and Future," Center for Policy Research Policy Briefs 19, Center for Policy Research, Maxwell School, Syracuse University. [Downloadable!]
  8. Alan B. Krueger & Bruce D. Meyer, 2002. "Labor Supply Effects of Social Insurance," NBER Working Papers 9014, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  9. Mark D Brenner & David Fairris & John Ruser, 2002. "'Flexible' Work Practices and Occupational Safety and Health: Exploring the Relationship Between Cumulative Trauma Disorders and Workplace Transformation," Working Papers wp30, Political Economy Research Institute, University of Massachusetts at Amherst. [Downloadable!]
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