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The Adoption of Workers' Compensation in the United States, 1900-1930

  • Fishback, Price V
  • Kantor, Shawn Everett

Workers compensation was established by a coalition of workers, employers, and insurers who anticipated gains from replacing negligence liability. Employers anticipated reduced uncertainty and administration costs and were able to pass some of the costs of workers' compensation benefits on to workers through lower wages. The average worker anticipated higher postaccident benefits. Even if lower wages meant they "bought" better benefits, they anticipated better "insurance" of accident risk. Insurers expected to expand their coverage of workplace accidents. Legislative action was required because the courts did not recognize private contracts in which workers waived their rights to negligence suits prior to an accident. Changes in employers' liability served as the catalyst uniting the groups in support of the legislation. Workers' compensation was adopted earlier in states where employers' liability costs were increasing more, unions were stronger, plant sizes were larger, and to some extent where the Progressive movement was stronger. Copyright 1998 by the University of Chicago.

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Article provided by University of Chicago Press in its journal Journal of Law & Economics.

Volume (Year): 41 (1998)
Issue (Month): 2 (October)
Pages: 305-41

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Handle: RePEc:ucp:jlawec:v:41:y:1998:i:2:p:305-41
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