When to Start a Fight and When to Fight Back: Liability Disputes in the Workers' Compensation System
AbstractContrary to the original intention of no-fault workers' compensation laws, employers deny liability for a substantial fraction of on-the-job injuries. We develop and estimate a simple structural model that explains the high rate of litigation as a consequence of asymmetric information. We estimate the model using data for a large sample of back injuries in Minnesota. Simulations under the counterfactual assumption that all denied workers pursue their claims suggest that the strategic incentive accounts for 30%-40% of observed liability disputes. (c) 2009 by The University of Chicago.
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Labor Economics.
Volume (Year): 27 (2009)
Issue (Month): 2 (04)
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Web page: http://www.journals.uchicago.edu/JOLE/
Other versions of this item:
- David Card & Brian P. McCall, 2006. "When to Start a Fight and When to Fight Back: Liability Disputes in the Workers' Compensation System," NBER Working Papers 11918, National Bureau of Economic Research, Inc.
- K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
- J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
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