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

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  • Fishback, Price V
  • Kantor, Shawn Everett

Abstract

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.

Suggested Citation

  • Fishback, Price V & Kantor, Shawn Everett, 1998. "The Adoption of Workers' Compensation in the United States, 1900-1930," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 305-341, October.
  • Handle: RePEc:ucp:jlawec:v:41:y:1998:i:2:p:305-41
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    File URL: http://dx.doi.org/10.1086/467392
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Fabrice Murtin & Martina Viarengo, 2008. "The Convergence of Compulsory Schooling in Western Europe: 1950-2000," CEE Discussion Papers 0095, Centre for the Economics of Education, LSE.
    3. Eli, Shari & Salisbury, Laura, 2016. "Patronage Politics and the Development of the Welfare State: Confederate Pensions in the American South," The Journal of Economic History, Cambridge University Press, vol. 76(04), pages 1078-1112, December.
    4. David Eduardo Cavazos & Matthew A. Rutherford, 2017. "Applying firm attention theory to assess the antecedents of firm participation in regulatory processes," Review of Managerial Science, Springer, vol. 11(2), pages 395-410, March.
    5. Fabrice Murtin & Martina Viarengo, 2007. "The convergence process of compulsory schooling in Western Europe: 1950-2000," Working Papers halshs-00588053, HAL.
    6. Fabrice Murtin & Martina Viarengo, 2007. "The convergence process of compulsory schooling in Western Europe: 1950-2000," PSE Working Papers halshs-00588053, HAL.
    7. Raj Chetty & Amy Finkelstein, 2012. "Social Insurance: Connecting Theory to Data," NBER Working Papers 18433, National Bureau of Economic Research, Inc.
    8. Bogart, Dan, 2007. "Neighbors, networks, and the development of transport systems: Explaining the diffusion of turnpike trusts in eighteenth-century England," Journal of Urban Economics, Elsevier, vol. 61(2), pages 238-262, March.
    9. repec:eee:irlaec:v:52:y:2017:i:c:p:58-73 is not listed on IDEAS
    10. repec:hrv:faseco:34330197 is not listed on IDEAS
    11. Fabrice Murtin & Martina Viarengo, 2011. "The Expansion and Convergence of Compulsory Schooling in Western Europe, 1950–2000," Economica, London School of Economics and Political Science, vol. 78(311), pages 501-522, July.
    12. J.C. Herbert Emery, "undated". "America’s Rejection of Compulsory Government Health Insurance in the Progressive Era and its Legacy for National Insurance Today," Working Papers 2008-23, Department of Economics, University of Calgary, revised 01 Apr 2008.
    13. Christopher S. Decker & David T. Flynn, 2008. "Work-Related Accidents And The Level Of Market Competition: An Analysis Of Worker Injury Rates At U.S. Steel Corporation, 1907-1939," Economic Inquiry, Western Economic Association International, vol. 46(3), pages 438-453, July.

    More about this item

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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