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Separating the Reporting Effects from the Injury Rate Effects of Workers' Compensation Insurance: A Hedonic Simulation

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  • Thomas J. Kniesner
  • John D. Leeth

Abstract

This paper presents a numerical simulation, based on data from the early 1970s, to investigate the economic links between labor market outcomes and the workers' compensation insurance system. The results suggest that, in most cases, any of three changes in the system—more generous benefits, more accurate categorization of insurance claims, or more complete experience rating of premiums—will slightly reduce the actual number of work-related injuries but will dramatically increase the number of insurance claims filed. The authors conclude that changes in self-reported injuries can produce significant misimpressions of the safety incentives created by the workers' compensation insurance system.

Suggested Citation

  • Thomas J. Kniesner & John D. Leeth, 1989. "Separating the Reporting Effects from the Injury Rate Effects of Workers' Compensation Insurance: A Hedonic Simulation," ILR Review, Cornell University, ILR School, vol. 42(2), pages 280-293, January.
    • Handle: RePEc:sae:ilrrev:v:42:y:1989:i:2:p:280-293
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    Cited by:

    1. Askenazy, Philippe, 2006. "Some determinants of reporting workplace accidents in France: The role of labour contract," CEPREMAP Working Papers (Docweb) 0603, CEPREMAP.
    2. Alison Morantz, 2010. "Opting Out of Workers' Compensation in Texas: A Survey of Large, Multistate Nonsubscribers," NBER Chapters, in: Regulation vs. Litigation: Perspectives from Economics and Law, pages 197-238, National Bureau of Economic Research, Inc.
    3. Fortin, Bernard & Lanoie, Paul, 1998. "Effects of Workers' Compensation: A Survey," Cahiers de recherche 9816, Université Laval - Département d'économique.
    4. Barry T. Hirsch & David A. MacPherson & J. Michael Dumond, 1997. "Workers#x0027; Compensation Recipiency in Union and Nonunion Workplaces," ILR Review, Cornell University, ILR School, vol. 50(2), pages 213-236, January.
    5. Boone, Jan & van Ours, Jan C., 2006. "Are recessions good for workplace safety?," Journal of Health Economics, Elsevier, vol. 25(6), pages 1069-1093, November.
    6. 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 228-240, May.
    7. Butler, Richard J. & Hartwig, Robert P. & Gardner, Harold, 1997. "HMOs, moral hazard and cost shifting in workers' compensation," Journal of Health Economics, Elsevier, vol. 16(2), pages 191-206, April.
    8. Samuel K. ALLEN, 2015. "Struggle for Regulatory Power between States and the US Federal Government: The Case of Workers’ Compensation Insurance 1930-2000," Journal of Economics and Political Economy, KSP Journals, vol. 2(3), pages 351-373, September.
    9. Lu Jinks & Thomas J. Kniesner & John Leeth & Anthony T. Lo Sasso, 2020. "Opting out of workers’ compensation: Non-subscription in Texas and its effects," Journal of Risk and Uncertainty, Springer, vol. 60(1), pages 53-76, February.

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