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Compensation for Permanent Impairment and the Duration of Work Absence: Evidence from Four Natural Experiments

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  • William P. Curington

Abstract

A natural experiment approach is used to examine the effect of legislative changes in New York Workers' Compensation benefits on the duration of work absence. Using data from before and after the legislative changes, a treatment group is compared to a control group unaffected by the changes. Duration/benefit elasticity estimates for minor permanent impairments are found to be similar to existing estimates for temporary impairments but are much smaller than estimates for severe permanent impairments. When benefits available after a work absence were increased but the benefits during work absence were unchanged, duration of minor impairment claims was unchanged, but workers with severe impairments reduced the length of their work absence. This finding, together with the elasticity estimates, implies that a policy that constrained weeks of benefits but increased the value of benefits after the work absence relative to those during the absence could reduce the overall duration of work absence.

Suggested Citation

  • William P. Curington, 1994. "Compensation for Permanent Impairment and the Duration of Work Absence: Evidence from Four Natural Experiments," Journal of Human Resources, University of Wisconsin Press, vol. 29(3), pages 888-910.
  • Handle: RePEc:uwp:jhriss:v:29:y:1994:iii:1:p:888-910
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    Citations

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    Cited by:

    1. Ziebarth, Nicolas R. & Karlsson, Martin, 2010. "A natural experiment on sick pay cuts, sickness absence, and labor costs," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 1108-1122, December.
    2. Andersen, Signe Hald, 2010. "The cost of sickness: On the effect of the duration of sick leave on post-sick leave earnings," Social Science & Medicine, Elsevier, vol. 70(10), pages 1581-1589, May.
    3. Martin Ljunge, 2011. "Sick of Taxes? Evidence on the Elasticity of Labor Supply when Workers Are Free to Choose," Discussion Papers 11-27, University of Copenhagen. Department of Economics.
    4. Nilsson, Martin, 2015. "Economic incentives and long-term sickness absence: the indirect effect of replacement rates on absence behavior," Working Paper Series 2015:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    5. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-161, April.
    6. Fortin, Bernard & Lanoie, Paul, 1998. "Effects of Workers' Compensation: A Survey," Cahiers de recherche 9816, Université Laval - Département d'économique.
    7. Galizzi, Monica & Boden, Leslie I., 2003. "The return to work of injured workers: evidence from matched unemployment insurance and workers' compensation data," Labour Economics, Elsevier, vol. 10(3), pages 311-337, June.
    8. Geetha M. Waehrer & Ted R. Miller, 2003. "Restricted Work, Workers’ Compensation, and Days Away from Work," Journal of Human Resources, University of Wisconsin Press, vol. 38(4).
    9. Maria De Paola & Vincenzo Scoppa & Valeria Pupo, 2014. "Absenteeism in the Italian Public Sector: The Effects of Changes in Sick Leave Policy," Journal of Labor Economics, University of Chicago Press, vol. 32(2), pages 337-360.
    10. Nicolas R. Ziebarth & Martin Karlsson, 2014. "The Effects Of Expanding The Generosity Of The Statutory Sickness Insurance System," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(2), pages 208-230, March.
    11. Ziebarth, Nicolas R., 2013. "Long-term absenteeism and moral hazard—Evidence from a natural experiment," Labour Economics, Elsevier, vol. 24(C), pages 277-292.
    12. Bruce Cater & Sohee Kang & Byron Lew & Marco Pollanen, 2013. "Permanent Injury and the Disability-Mitigating Effects of Education," Economics Bulletin, AccessEcon, vol. 33(3), pages 2064-2079.
    13. Krueger, Alan B. & Meyer, Bruce D., 2002. "Labor supply effects of social insurance," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 33, pages 2327-2392 Elsevier.
    14. Maria De Paola & Valeria Pupo & Vincenzo Scoppa, 2009. "Absenteeism In The Italian Public Sector: The Effects Of Changes In Sick Leave Compensation," Working Papers 200916, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.

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