The Employers' cost of Workers' Compensation Insurance: Magnitudes, Determinants, and Public Policy
This paper presents estimates of the average cost of the workers' compensation insurance program for a homogeneous group of employers by state. These estimates are of interest because they reflect the operation, direct nominal costs, and efficiency of workers' compensation. The paper estimates cost equations for a variety of alternative specifications. The main finding is that when cost equations are estimated by ordinary least squares there is a unit elasticity of costs with respect to benefits, but instrumental variable estimates of the effect of benefits yield a greater than unit elasticity. The results also indicate that the presence of a state insurance fund is associated with higher average costs to employers, all else equal. Finally, we explore the impact that the minimum standards recommended by the National Commission on State Workmen's Compensation Laws would have on workers' compensation costs.
|Date of creation:||Jul 1989|
|Date of revision:|
|Publication status:||published as The Review of Economics and Statistics, Volume 72, Number 2, May 1990, pp. 228-240.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hausman, Jerry A. & Taylor, William E., 1981.
"Panel data and unobservable individual effects,"
Journal of Econometrics,
Elsevier, vol. 16(1), pages 155-155, May.
- Thomas J. Kniesner & John D. Leeth, 1989. "Separating the reporting effects from the injury rate effects of workers' compensation insurance: A hedonic simulation," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 42(2), pages 280-293, January.
- Butler, Richard J & Worrall, John D, 1983. "Workers' Compensation: Benefit and Injury Claims Rates in the Seventies," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 580-89, November.
- Breusch, Trevor S & Mizon, Grayham E & Schmidt, Peter, 1989. "Efficient Estimation Using Panel Data," Econometrica, Econometric Society, vol. 57(3), pages 695-700, May.
- Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-94, September.
- Hamermesh, Daniel S & Wolfe, John R, 1990.
"Compensating Wage Differentials and the Duration of Wage Loss,"
Journal of Labor Economics,
University of Chicago Press, vol. 8(1), pages S175-97, January.
- Daniel S. Hamermesh & John R. Wolfe, 1986. "Compensating Wage Differentials and the Duration of Wage Loss," NBER Working Papers 1887, National Bureau of Economic Research, Inc.
- H. Allan Hunt & Alan B. Krueger & John F. Burton Jr., 1988. "The Impact of Open competition in Michigan on the Employers' costs of Workers' Compensation," Book chapters authored by Upjohn Institute researchers, in: Workers' Compensation Insurance Pricing: Current Programs and Proposed Reform, pages 109-144 W.E. Upjohn Institute for Employment Research.
- Viscusi, W Kip & Moore, Michael J, 1987. "Workers' Compensation: Wage Effects, Benefit Inadequacies, and the Value of Health Losses," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 249-61, May.
- Thomas J. Kniesner & John D. Leeth, 1989. "Separating the Reporting Effects from the Injury Rate Effects of Workers' Compensation Insurance: A Hedonic Simulation," ILR Review, Cornell University, ILR School, vol. 42(2), pages 280-293, January.
- Ronald G. Ehrenberg, 1985. "Workers' Compensation, Wages, and the Risk of Injury," NBER Working Papers 1538, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:3029. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.