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Incentive Effects of Public Insurance Programs on the Occurence and the Composition of Workplace Injuries

Author

Listed:
  • Denis Bolduc
  • Bernard Fortin
  • France Labrecque
  • Paul Lanoie

Abstract

This paper provides evidence that workers' compensation (WC) and unemployment insurance (UI)could affect not only the occurence of workplace accident claims, but also the composition of these reported accidents. Our theoretical framework predicts that, under plausible assumptions, an increase in the wage replacement ratio under WC (or a decrease in the UI wage replacement ratio) leads to a larger increase in the probability of reporting a difficult-to-diagnose injury than in the probability of reporting an easy-to-diagnose injury. Panel data on 9800 workers in the Québec construction industry over each month of the period 1977-1986, combining administrative data from the Québec Construction Board and the Québec Workers' Compensation Board, were used for the estimations. The parameters of the model are estimated using a three alternative MultiNomial Probit (MNP) framework with individual random effects. Our results confirm our theoretical predictions. In particular, the impact of the WC replacement ratio on the probability of accidents ranges (in terms of elasticity) from 0.83 to 1.45 for difficult-to-diagnose injuries and from 0.72 to 1.03 for easy-to-diagnose injuries (for the period 1979-1986). In line with these results, we also show that the probability to report a difficult-to-diagnose injury is significantly greater in winter (the dead season in the construction industry) than in other seasons. Cet article présente des résultats empiriques selon lesquels l'assurance contre les accidents du travail (AA) et l'assurance-chômage (AC) n'influencent pas uniquement l'incidence des accidents du travail,0501s aussi la composition des accidents rapportés. Le cadre théorique prédit que, selon les hypothèses plausibles, une hausse du taux de remplacement du salaire par l'AA (ou baisse du taux de remplacement du salaire par l'AC) conduit à une augmentation plus élevée de la probabilité de déclarer une lésion professionnelle difficile à diagnostiquer qu'une lésion facile à diagnostiquer. Aux fins d'estimation, on utilise des données longitudinales mensuelles sur plus de 9800 travailleurs oeuvrant dans le secteur de la construction au Québec entre 1977 et 1986. Ces données proviennent d'un jumelage de données administratives de la Commission de la construction du Québec et de la Commission de la santé et de la sécurité du travail. Les paramètres du modèle sont estimés à l'aide d'un modèle probit polytomique à trois alternatives avec effets individuels aléatoires. Les résultats confirment les prédictions du modèle théorique. En particulier, l'élasticité de la probabilité d'accidents par rapport au taux de remplacement de l'AA varie entre 0,83 et 1,45 dans le cas de lésions difficiles à diagnostiquer, et entre 0,72 et 1,03 dans le cas de lésions faciles à diagnostiquer (pour la période entre 1979 et 1986). En outre, la probabilité de déclarer un accident difficile à diagnostiquer s'accroît durant la saison d'hiver (i.e. la saison où le taux de chômage dans le secteur de la construction est le plus élevé).

Suggested Citation

  • Denis Bolduc & Bernard Fortin & France Labrecque & Paul Lanoie, 1997. "Incentive Effects of Public Insurance Programs on the Occurence and the Composition of Workplace Injuries," CIRANO Working Papers 97s-24, CIRANO.
  • Handle: RePEc:cir:cirwor:97s-24
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    File URL: http://www.cirano.qc.ca/files/publications/97s-24.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Fortin, B. & Lanoie, P., 1998. "Effects of Workers' Compensation : A Survey," Papers 9816, Laval - Recherche en Politique Economique.
    2. Pierre André Chiappori & Bernard Salanié, 2002. "Testing Contract Theory: A Survey of Some Recent Work," CESifo Working Paper Series 738, CESifo Group Munich.

    More about this item

    Keywords

    Workers' compensation; unemployment insurance; moral hazard; multinomial probit; Lésions professionnelles; assurance-chômage; aléa moral; probit polytomique;

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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