The Employers' cost of Workers' Compensation Insurance: Magnitudes, Determinants, and Public Policy
AbstractThis paper presents estimates of the average cost of the workers' compensation insurance program for a homogeneous group of employers by state. These estimates are of interest because they reflect the operation, direct nominal costs, and efficiency of workers' compensation. The paper estimates cost equations for a variety of alternative specifications. The main finding is that when cost equations are estimated by ordinary least squares there is a unit elasticity of costs with respect to benefits, but instrumental variable estimates of the effect of benefits yield a greater than unit elasticity. The results also indicate that the presence of a state insurance fund is associated with higher average costs to employers, all else equal. Finally, we explore the impact that the minimum standards recommended by the National Commission on State Workmen's Compensation Laws would have on workers' compensation costs.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3029.
Date of creation: Jul 1989
Date of revision:
Publication status: published as The Review of Economics and Statistics, Volume 72, Number 2, May 1990, pp. 228-240.
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Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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Other versions of this item:
- Krueger, Alan B & Burton, John F, Jr, 1990. "The Employers' Costs of Workers' Compensation Insurance: Magnitudes, Determinants, and Public Policy," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 228-40, May.
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- repec:fth:prinin:428 is not listed on IDEAS
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