Asymmetric Effects on Fatality Rates of Changes in Workers’ Compensation Laws

Author:

Gentry Elissa Philip1,Viscusi W Kip2

Affiliation:

1. Institute for Advanced Study in Toulouse, University of Toulouse Capitole, and Florida State University College of Law

2. Vanderbilt University

Abstract

Abstract With irreversible investments in safety, changes in workers’ compensation laws should affect employer incentives asymmetrically: increases in workers’ compensation generosity should cause employers to invest more in safety, but comparable decreases might not cause them to disinvest in existing precautionary programs or equipment. Although maximum weekly benefits caps have been fairly stable, state laws have expanded or restricted workers’ compensation on multiple other dimensions. State laws may impose new requirements regarding burdens of proof, access to medical care, and the duration of benefits. This article estimates the effect of changes in these more comprehensive measures of workers’ compensation laws on workplace safety. Using confidential, restricted data from the Census of Fatal Occupational Injuries, the article finds that increases in workers’ compensation generosity lead to a significant decrease in fatality rates, while decreases in workers’ compensation generosity do not significantly increase fatality rates.

Funder

ANR-Labex IAST

Publisher

Oxford University Press (OUP)

Subject

Law,Finance

Reference41 articles.

1. Claiming Behavior in Workers’ Compensation;Biddle,;Journal of Risk and Insurance,2003

2. Revisiting Incentive Effects in Workers’ Compensation: Do Higher Benefits Really Induce More Claims;Bronchetti,;ILR Review: Journal of Work & Policy,2012

3. Lost Injury Days: Moral Hazard Differences between Tort and Workers’ Compensation;Butler,;The Journal of Risk and Insurance,1996

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