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Source: Bureau of Economic Analysis
Resulting in 1 citation.
1. Ruser, John W.
Pergamit, Michael R.
Krishnamurty, Parvati
Workers' Compensation "Reforms" and Benefit Claiming
Working Paper, U.S. Bureau of Economic Analysis, Washington DC, April 2004.
Cohort(s): NLSY79
Publisher: U.S. Department of Commerce
Keyword(s): Benefits; Heterogeneity; Injuries; Modeling; Unemployment Compensation

In the 1990s, states passed a variety of laws to stem a rapid rise in workers' compensation insurance costs, by raising the cost and reducing the expected benefit to a worker of filing a claim. In this paper, we first develop a model of benefit claiming with heterogeneous injury severity, costly claiming, and uncertain benefit payment. The model predicts that raising the cost or reducing the expected benefit from filing a claim would result in fewer, but on average more severe claims being filed. Using a multivariate difference in differences technique and data from the National Longitudinal Survey of Youth - 1979, we then empirically assess the impact of the laws on injuries, claims, and benefits. We find no evidence that legislative changes to restrict doctor choice, to reduce the compensability of injuries or to detect fraud had a measurable impact on injury or claim incidence, claim duration, or benefit receipt. However, we do find evidence that workers respond to economic costs and benefits in deciding to file claims. Benefit claiming is positively associated with the generosity of benefits, but negatively associated with the worker's wage (measuring a cost of claim filing). Also, consistent with the theory, more generous benefits and lower wages are associated with shorter average claim durations, possibly because claims are filed for less severe injuries.
Bibliography Citation
Ruser, John W., Michael R. Pergamit and Parvati Krishnamurty. "Workers' Compensation "Reforms" and Benefit Claiming." Working Paper, U.S. Bureau of Economic Analysis, Washington DC, April 2004.