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Returning to Work from Injury: Longitudinal Evidence on Employment and Earnings

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  • Sarah Crichton
  • Steven Stillman
  • Dean Hyslop

Abstract

New Zealand has a unique accident insurance system that pays the direct costs of all injuries and compensates workers up to 80% of their earnings for any time that they are unable to work. To estimate the effect of injuries on labor market outcomes, the authors use Statistics New Zealand's Linked Employer-Employee Database (LEED) covering the period April 1999 to March 2004 using a difference-in-differences matching approach. They use two alternative matching criteria to construct control groups of non-injured workers whose pre-injury characteristics are similar to those of injured workers: the first uses only characteristics of the workers whereas the second exploits the nature of the LEED and matches workers in the same firm. Findings indicate that injuries resulting in more than three months of earnings compensation have negative effects on future labor market outcomes that do not decline with time post-injury. The results are broadly similar using both matching criteria, providing more validity to the authors' findings.

Suggested Citation

  • Sarah Crichton & Steven Stillman & Dean Hyslop, 2011. "Returning to Work from Injury: Longitudinal Evidence on Employment and Earnings," ILR Review, Cornell University, ILR School, vol. 64(4), pages 765-785, July.
    • Handle: RePEc:sae:ilrrev:v:64:y:2011:i:4:p:765-785
    DOI: 10.1177/001979391106400407
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    References listed on IDEAS

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    1. Anikó Bíró & Márta Bisztray & João G. da Fonseca & Tímea Laura Molnár, 2023. "Accident-induced absence from work and wage ladders," IFS Working Papers W23/30, Institute for Fiscal Studies.
    2. McAllister, Susan & Derrett, Sarah & Audas, Rick & Herbison, Peter & Paul, Charlotte, 2013. "Do different types of financial support after illness or injury affect socio-economic outcomes? A natural experiment in New Zealand," Social Science & Medicine, Elsevier, vol. 85(C), pages 93-102.
    3. Francisco Parro & R. Vincent Pohl, 2021. "The effect of accidents on labor market outcomes: Evidence from Chile," Health Economics, John Wiley & Sons, Ltd., vol. 30(5), pages 1015-1032, May.
    4. Emmanuel Duguet & Christine Le Clainche, 2014. "The Effect of Non-Work Related Health Events on Career Outcomes: An Evaluation in the French Labor Market," Revue d'économie politique, Dalloz, vol. 124(3), pages 437-465.
    5. Emmanuel Duguet & Christine Le Clainche, 2020. "The Socioeconomic and Gender Impacts of Health Events on Employment Transitions in France: A Panel Data Study," Journal of Human Capital, University of Chicago Press, vol. 14(3), pages 449-483.
    6. Gabriele Mazzolini, 2020. "The Economic Consequences of Accidents at Work," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(5), pages 1068-1093, October.
    7. Chadi, Adrian & Goerke, Laszlo, 2015. "Missing at Work - Sickness-related Absence and Subsequent Job Mobility," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112862, Verein für Socialpolitik / German Economic Association.
    8. Mohamed Ali Ben Halima & Camille Regaert, 2015. "Quel est l’impact de la survenue d’un accident du travail sur la santé et le parcours professionnel ?," Working Papers DT68, IRDES institut for research and information in health economics, revised Jul 2015.
    9. Konstantinos, Pouliakas & Ioannis, Theodossiou, 2010. "An Inquiry Into the Theory, Causes and Consequences of Monitoring Indicators of Health and Safety At Work," MPRA Paper 20336, University Library of Munich, Germany.
    10. Emmanuel Duguet & Christine Le Clainche, 2012. "Chronic Illnesses and Injuries: An Evaluation of their Impact on Occupation and Revenues," Erudite Working Paper 2012-03, Erudite.
    11. Gabriele Mazzolini, 2014. "The economic consequences of accidents at work," DISCE - Working Papers del Dipartimento di Economia e Finanza def015, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    12. Schurer, Stefanie, 2017. "Bouncing back from health shocks: Locus of control and labor supply," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 1-20.
    13. Keith Bender & Colin Green & John Heywood, 2012. "Piece rates and workplace injury: Does survey evidence support Adam Smith?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 569-590, January.
    14. Emmanuel Duguet & Christine Le Clainche, 2014. "Chronic Illnesses and Injuries: An Evaluation of their Impact on Occupation and Revenues / Maladies chroniques et accidents : une évaluation de leur impact sur le parcours professionnel et les revenus," Working Papers halshs-00966970, HAL.
    15. Halla, Martin & Zweimüller, Martina, 2013. "The effect of health on earnings: Quasi-experimental evidence from commuting accidents," Labour Economics, Elsevier, vol. 24(C), pages 23-38.
    16. Chadi, Adrian & Goerke, Laszlo, 2018. "Missing at work – Sickness-related absence and subsequent career events," Journal of Economic Behavior & Organization, Elsevier, vol. 153(C), pages 153-176.
    17. repec:ctc:serie1:def15 is not listed on IDEAS
    18. Collischon, Matthias & Hiesinger, Karolin & Pohlan, Laura, 2023. "Disability and Labor Market Performance," IZA Discussion Papers 16100, Institute of Labor Economics (IZA).
    19. Mario Lackner & Hendrik Sonnabend, 2023. "Presenteeism when employers are under pressure: evidence from a high‐stakes environment," Economica, London School of Economics and Political Science, vol. 90(358), pages 477-507, April.

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    More about this item

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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