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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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File URL: http://dx.doi.org/10.1086/467392
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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
Contact details of provider: Web page: http://www.journals.uchicago.edu/JLE/

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  2. Fishback, Price V., 1992. "Soft Coal, Hard Choices: The Economic Welfare of Bituminous Coal Miners, 1890-1930," OUP Catalogue, Oxford University Press, number 9780195067255, December.
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  8. Kim, Seung-Wook & Fishback, Price V., 1993. "Institutional Change, Compensating Differentials, and Accident Risk in American Railroding, 1892–1945," The Journal of Economic History, Cambridge University Press, vol. 53(04), pages 796-823, December.
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  14. Price V. Fishback & Shawn Everett Kantor, 1995. "Did Workers Pay for the Passage of Workers' Compensation Laws?," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 713-742.
  15. Kantor, Shawn Everett & Fishback, Price V, 1996. "Precautionary Saving, Insurance, and the Origins of Workers' Compensation," Journal of Political Economy, University of Chicago Press, vol. 104(2), pages 419-42, April.
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