Sensitivity Analysis of Workers' Compensation Costs

The unusual circumstance of a substantial decrease in the level of workers' compensation benefits for a well-defined group of employees permitted investigation of the relationship between benefit levels and injury rates. It was found that lower benefit levels were associated with a significantly lower frequency of injuries. There was no significant relationship between benefits and injury severity. The nature of the quasi-experimental data allows the inference that it was the benefit level change that brought about the change in frequency rates rather than the reverse. Workers' compensation has two important social functions. It is intended to provide income and medical security for injured workers and prevention incentives for employers [9]. Assessing the achievment of the security goal has always been relatively straightforward in that one need only measure the benefits paid to injured workers and compare them with whatever standard of adequacy is deemed appropriate [1]. Until quite recently, however, the contribution of workers' compensation to safety incentives has been a matter of speculation rather than analysis. Complex issues of causation, data availability, and statistical methodology long kept the prevention issue from being systematically addressed. Beginning with the National Commission on State Workmen's Compensation Laws (1972) and spurred along by the dramatic changes in workers' compensation during the 1970s, a program of research has begun to examine the role of workers' compensation in encouraging prevention [2,4,6,9]. It is the purpose of this paper to further understanding of the safety incentives of workers' compensation by analyzing data covering the previously unexplored circumstance of a decline in workers' compensation benefits. James R. Chelius is Associate Professor in the Institute of Management and Labor Relations at Rutgers University. He earned the Ph.D. degree at the University of Chicago. A former Director of the Occupational Safety and Health Center at Rutgers, he currently serves on a GAO Panel studying the veteran's disability system. Dr. Chelius authored Workplace Safety and Health: The Role of Workers' Compensation and edited Current Issues in Workers' Compensation. Karen Kavenaugh earned the M.S. degree in Industrial Relations and Human Resources at Rutgers University. This content downloaded from 157.55.39.127 on Wed, 29 Jun 2016 05:22:45 UTC All use subject to http://about.jstor.org/terms 316 The Journal of Risk and Insurance Workers' Compensation Safety Incentives Since the debate over the initial passage of workers' compensation laws at the beginning of this century, it has been asserted that an employer's automatic liability for work injuries would encourage greater attention to prevention. The predefined visible penalty of having to pay workers' compensation benefits has been thought to yield a greater incentive than the potentially large but uncertain liabilities of the previously used tort mechanism. The scant empirical evidence on this issue indicates that the introduction of workers' compensation was indeed associated with a lowering of industrial death rates [5]. It follows from the same rationale that the level of compensation benefits might influence the extent to which employers are willing to invest in prevention. Higher benefits would seem to yield a greater incentive for prevention. The presence of compensating wage differentials for risk, however, makes the relationship between benefits and incentives less straightforward. To the extent workers' compensation benefits merely substitute for wage premiums that otherwise would have been paid, a larger benefit simply changes the manifestation of the safety incentive rather than its magnitude. While there is some evidence of an offset between wages and workers' compensation benefits in the non-union sector [7], it is not so widespread or perfect so as to eliminate the potential relationship between benefit levels and employer safety incentives. The relationship between benefit levels and safety is also complicated by the impact of workers' compensation on employees. Just as a higher benefit increases the cost of an accident to the employer, it decreases that cost to the employee. A higher workers' compensation benefit thus may give less prevention incentive to employees. Since both employers and employees have a role in accident prevention, it is impossible theoretically to determine whether higher benefits cause the net level of accidents to be higher or lower. In practice the impact of higher benefit levels is further confounded because such benefits give employees an incentive to report real or imagined injuries that would go unreported if benefits were lower. While theoretically ambiguous, the empirical evidence on benefit levels and safety has been quite consistent. Studies of this relationship indicate that higher benefits are associated with higher levels of reported injuries [2,4,6,9]. This does not necessarily mean that employers are not encouraged to greater prevention efforts by higher benefits. It merely indicates that the influence of benefit levels on employee behavior is greater than their influence on employer behavior. Many uncertainties remain, however, as to the exact nature of this relationship. It is sometimes asserted, for example, that the positive relationship between benefits and injuries is due to high injury rates causing high benefit levels rather than the reverse the hypothesis being that high levels of injury cause governments to enact high benefit levels. Whether the This content downloaded from 157.55.39.127 on Wed, 29 Jun 2016 05:22:45 UTC All use subject to http://about.jstor.org/terms Workers' Compensation and the Level of Occupational Injuries 317 high injury rates associated with high benefits are due to more real injuries or simply more reported injuries is also a controversial issue. The unusual circumstance of a decline in workers' compensation benefits in a quasiexperimental setting provided an opportunity to analyze the robustness of the positive relationship between benefits and injury rates. The data also allow for some insight into the causal nature of the relationship as well as the type of injury most influenced by benefit levels.

While electorates and governments struggle to assess the difficult technical and political issues of nuclear armament and, especially, the testing of such weapons, the radiation hazard of industrial uses of atomic products has become a fact for an increasing number of workers. Industrial applications of radioactive isotopes and nuclear energy are multiplying rapidly and the number of workers exposed to the risk of illness and death from such sources also appears to be increasing. Under private use, workers injured and disabled by radiation must seek the protection of state workmen's compensation laws for medical and economic rehabilitation. In this discussion, the author examines the reasons for growing concern over radiation as an occupational hazard and analyzes four basic issues which radiation disease presents for state workmen's compensation laws. In general, he finds that only a few of these laws approach recommended standards of protection; under a number of laws, workers injured by exposure to radiation actually receive protection and benefits less favorable than those available to the victims of more conventional industrial accidents and disease. (Author's abstract courtesy EBSCO.)

REVERSIONARY ANNUITIES AS APPLIED TO THE EVALUATION OF LAW AMENDMENT FACTORS

HE STATUS of a prisoner with respect to his rights under the workmen's compensation laws is one of exceptional interest, particularly at the present time when recent legislation and the increased use of convicts in connection with the war effort have served to focus attention upon the subject. The compensation problems of the prisoner are mainly concerned with whether he is an employee under the workmen's compensation law and, if so, whether he has a right to prosecute a claim for benefits before state and federal commissions. Stated more concisely, these are questions of the prisoner's status (1) as an employee, and (2) as a litigant. I. Status As Employee

This article investigates the implementation of state workmen's compensation programs using a two-stage approach. Initially the agency that delivers workmen's compensation benefits and services is examined to determine what factors are important in explaining the agency's performance. Next the organization's performance is used as an independent variable along with other socioeconomic and political indicators to examine policy impact. The findings suggest that organizational characteristics are important determinants of organizational performance but organizational performance is not a significant factor in explaining policy impact.

This is a record of the proceedings of a committee appointed by the Cincinnati Chamber of Commerce to investigate workmen's compensation laws and insurance carriers. The investigation extended over practically the entire United States and into the Dominion of Canada. A verbatim report of evidence taken by the committee and copies of briefs filed with it cover almost a thousand pages. Of conditions found, the committee says: "We are compelled to believe, after our extensive investigation, that there are entirely too many accidents occurring in industry; that the length of disability could be measurably decreased; that the reclamation of the industrial cripple has been hardly touched; and that the level of benefits is not entirely adequate." The committee reported no conclusions or recommendations with respect to the freedom of choice of physicians by injured workmen. Testimony regarding the medical relations of workmen's compensation acts is scattered through the general mass

We conducted a comprehensive review of state workers’ compensation laws in the United States to evaluate the extent to which they support first responders with mental injury. Most state workers’ compensation systems divide mental injuries into categories based on their presumed etiology: physical-mental, mental-physical, and mental-mental. Major differences exist among states as to which workers are eligible. Proving workplace causation can be difficult where no traumatic physical injuries exist. Latency periods, time limits, preexisting health conditions, restrictions as to types of condition covered, and complex chains of causation may make this burden, which falls on the claimant, even more challenging. Only nine (9) states enacted presumption of causation laws for mental health conditions to ease claimants’ burden of proof. This contrasts starkly with presumption laws for chronic and infectious diseases. State decision-makers should create presumptions that mental health conditions in first responders are caused or significantly exacerbated by their stressful workplaces.

Workmen's Compensation Law in Louisiana

Injury to the Deceased or Disabled Employee under the California Workmen's Compensation Laws

The Workmen's Compensation Law

Some Problems under Workmen's Compensation Laws

Admiralty. Jurisdiction. Workmen's Compensation Law

<i>Administration of the Workmen's Compensation Law in the State of New York: Report to Honorable Thomas E. Dewey, Governor of the State of New York</i>. Willian F. Bleakley , Herman T. Stichman

A PPROXIMATELY 3 percent of all occupationially caused disabilities are attributable to disease. The remainder fall into the category of accidenital injuries. In New York State (1), and presumably in other States as well, about half of all reported occupational diseases were found in blue collar workers or workers engaged in manlufacturing. WIhy then this interest in the occupational diseases of white collar workers? The reasons are simple: Occupationial diseases are largely preventable, anid wlhen they occur they are expensive. The legal definition of an occupational disease varies in each State, depending on the scope of its workmen's compensation law. For the purposes of this study, an occupational disease is definied as a compensable disease that arises out of and in the course of employment. It is any abnormal condition of health due to specific occupational hazard other than trauma. In general, occupational diseases fit into the following categories: dermatoses; diseases due to infectious agents; diseases due to dusts, fumes, gases, vapors, or mists; or diseases due to physical agents. Newly added are aggravation of pre-existing nonoccupational diseases and emotional stress. Many times it is exceedingly difficult to determine whether a specific illness occurred on the job or elsewhere, as, for example, in the household kitchen. This applies particularly to dermatological conditions.

Abstract