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Asymmetric Effects on Fatality Rates of Changes in Workers’ Compensation Laws

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  • Elissa Philip Gentry
  • W Kip Viscusi

Abstract

With irreversible investments in safety, changes in workers’ compensation laws should affect employer incentives asymmetrically: increases in workers’ compensation generosity should cause employers to invest more in safety, but comparable decreases might not cause them to disinvest in existing precautionary programs or equipment. Although maximum weekly benefits caps have been fairly stable, state laws have expanded or restricted workers’ compensation on multiple other dimensions. State laws may impose new requirements regarding burdens of proof, access to medical care, and the duration of benefits. This article estimates the effect of changes in these more comprehensive measures of workers’ compensation laws on workplace safety. Using confidential, restricted data from the Census of Fatal Occupational Injuries, the article finds that increases in workers’ compensation generosity lead to a significant decrease in fatality rates, while decreases in workers’ compensation generosity do not significantly increase fatality rates.

Suggested Citation

  • Elissa Philip Gentry & W Kip Viscusi, 2019. "Asymmetric Effects on Fatality Rates of Changes in Workers’ Compensation Laws," American Law and Economics Review, American Law and Economics Association, vol. 21(2), pages 307-345.
  • Handle: RePEc:oup:amlawe:v:21:y:2019:i:2:p:307-345.
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    File URL: http://hdl.handle.net/10.1093/aler/ahz007
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    Cited by:

    1. Zabinski, Zenon & Black, Bernard S., 2022. "The deterrent effect of tort law: Evidence from medical malpractice reform," Journal of Health Economics, Elsevier, vol. 84(C).
    2. Andy Yuan & Price V. Fishback, 2020. "Rising Burdens of Proofs and The Grand Bargain of Workers’ Compensation Laws," NBER Working Papers 26980, National Bureau of Economic Research, Inc.

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