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Worker's Compensation Insurance and the Duration of Workplace Injuries

Author

Listed:
  • Alan B. Krueger

    (Princeton University and NBER)

Abstract

This paper uses a new administrative micro-data set to examine the effect of a legislated increase in the minimum and maximum workers' compensation benefit on the duration of workplace injuries in Minnesota. As a result of legislation, workers in some earnings groups received higher benefits if they were injured after the effective date of the benefit increase, while workers in other earnings groups received the same benefit regardless of when they were injured. The analysis compares the change in mean log injury duration for workers who were affected by the benefit increase to that of workers who were not affected by the benefit increase. The findings indicate that the duration of injuries increased by 8 percent more for the group of workers that experienced a 5 percent increase in benefits than for the group of workers that had no change in their benefit. Additional findings suggest that employees of self-insured firms who are injured on the job tend to return to work faster than employees of imperfectly experience rated firms who incur similar injuries.

Suggested Citation

  • Alan B. Krueger, 1990. "Worker's Compensation Insurance and the Duration of Workplace Injuries," Working Papers 641, Princeton University, Department of Economics, Industrial Relations Section..
  • Handle: RePEc:pri:indrel:261
    as

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    References listed on IDEAS

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    1. repec:fth:prinin:255 is not listed on IDEAS
    2. Krueger, Alan B & Pischke, Jorn-Steffen, 1992. "The Effect of Social Security on Labor Supply: A Cohort Analysis of the Notch Generation," Journal of Labor Economics, University of Chicago Press, vol. 10(4), pages 412-437, October.
    3. Krueger, Alan B., 1990. "Incentive effects of workers' compensation insurance," Journal of Public Economics, Elsevier, vol. 41(1), pages 73-99, February.
    4. Bound, John, 1989. "The Health and Earnings of Rejected Disability Insurance Applicants," American Economic Review, American Economic Association, vol. 79(3), pages 482-503, June.
    5. Bruce D. Meyer, 1989. "A Quasi-Experimental Approach to the Effects of Unemployment Insurance," NBER Working Papers 3159, National Bureau of Economic Research, Inc.
    6. Ronald G. Ehrenberg, 1985. "Workers' Compensation, Wages, and the Risk of Injury," NBER Working Papers 1538, National Bureau of Economic Research, Inc.
    7. Alan Krueger & Jorn-Steffen Pischke, 1989. "The Effect of Social Security on Labor Supply: A Cohort Analysis of the Notch Generation," Working Papers 635, Princeton University, Department of Economics, Industrial Relations Section..
    8. Butler, Richard J & Worrall, John D, 1985. "Work Injury Compensation and the Duration of Nonwork Spells," Economic Journal, Royal Economic Society, vol. 95(379), pages 714-724, September.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Cockx, Bart & Ridder, Geert, 2001. "Social Employment of Welfare Recipients in Belgium: An Evaluation," Economic Journal, Royal Economic Society, vol. 111(470), pages 322-352, April.
    2. repec:spr:eujhec:v:18:y:2017:i:9:d:10.1007_s10198-017-0878-6 is not listed on IDEAS
    3. 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.
    4. Meyer, Bruce D & Viscusi, W Kip & Durbin, David L, 1995. "Workers' Compensation and Injury Duration: Evidence from a Natural Experiment," American Economic Review, American Economic Association, vol. 85(3), pages 322-340, June.
    5. Pascale Lengagne, 2016. "Experience Rating and Work-Related Health and Safety," Journal of Labor Research, Springer, vol. 37(1), pages 69-97, March.
    6. Fortin, Bernard & Lanoie, Paul, 1998. "Effects of Workers' Compensation: A Survey," Cahiers de recherche 9816, Université Laval - Département d'économique.
    7. 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.
    8. Moral De Blas, Alfonso & Corrales-Herrero, Helena & Martín-Román, Ángel, 2012. "Glass Ceiling or Slippery Floors? Understanding Gender Differences in the Spanish Worker’s Compensation System/¿Techo de cristal o suelo resbaladizo? Comprendiendo las diferencias de género en el sist," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 30, pages 311-340, Abril.
    9. 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.
    10. Hansen, Benjamin & Nguyen, Tuan & Waddell, Glen R., 2017. "Benefit Generosity and Injury Duration: Quasi-Experimental Evidence from Regression Kinks," IZA Discussion Papers 10621, Institute for the Study of Labor (IZA).
    11. Pascale Lengagne & Anissa Afrite, 2015. "Experience Rating, Incidence of Musculoskeletal Disorders and Related Absences.Results from a Natural Experiment," Working Papers DT69, IRDES institut for research and information in health economics, revised Jul 2015.
    12. David T. Ellwood, 2001. "The Sputtering Labor Force of the 21st Century. Can Social Policy Help?," NBER Working Papers 8321, National Bureau of Economic Research, Inc.
    13. Ángel Martín-Román & Alfonso Moral, 2017. "A methodological proposal to evaluate the cost of duration moral hazard in workplace accident insurance," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(9), pages 1181-1198, December.
    14. repec:eee:irlaec:v:52:y:2017:i:c:p:58-73 is not listed on IDEAS
    15. repec:eee:labchp:v:3:y:1999:i:pc:p:3309-3416 is not listed on IDEAS
    16. Hyatt Henry R, 2011. "The Labor Supply Consequences of Employment-Limiting Social Insurance Benefits: New Tests for Income Effects," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-31, May.
    17. 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.
    18. Jonathan Gruber, 1994. "The Consumption Smoothing Benefits of Unemployment Insurance," NBER Working Papers 4750, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    workman's compensation insurance; injury duration; self-insurance;

    JEL classification:

    • H00 - Public Economics - - General - - - General

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