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Unclaimed injuries and workers' compensation adequacy.

Lakdawalla-D; Reville-R
NIOSH 2005 Sep; :1-9
The workers' compensation system was designed to provide health care and compensation for workers with occupational injuries or illness without regard to fault. Nearly all workers are covered by workers' compensation insurance, but not every worker that is injured on the job actually receives workers' compensation benefits. This project examines how many workers fail to file for compensation from job-related injuries, and what factors appear to explain this failure. It also examines the impact of this failure on the adequacy of wage replacement that workers' receive from the workers' compensation system. By doing so, it sheds important light on several important issues regarding the measurement of the economic consequences of workplace injuries, particularly for underserved populations. This study examines the filing decision of injured workers using data from the National Longitudinal Survey of Youth (NLSY), a nationally representative survey with detailed information on demographic variables as well as occupational injuries and workers' compensation filing. The approach used is to model the decision to file as a function of important demographic characteristics (such as education and union status), policy variables such as the generosity of workers' compensation benefits, injury severity and the presence of employer-provided health insurance. The results suggest that the workers who do not file appear to be those with the least alternative protection from the economic consequences of workplace injury, namely those without health insurance. This is a surprising result given that the standard argument is that those without health insurance should be more likely to file, because they have incentives to try and pass nonoccupational injuries off as occupational. The study finds that the offer of health insurance is more important to the filing decision than the actual receipt of health insurance. Moreover, among those workers who have health insurance, only those who receive it from their employers are more likely to file for workers' compensation. These facts lead to the conclusion that it is not actually health insurance that is affecting the filing decision, but rather what the offer of it reveals about employers. Employers appear to have the ability to influence the decision of workers' to file for workers' compensation benefits, and workers at firms who discourage claiming appear much less likely to do so. This is an important finding, because if workers' fail to file for workers' compensation benefits this will lessen the incentives of employers to invest in workplace safety measures. It is important to note that these results do not necessarily suggest that employers are actively discouraging filing; it may be that workers at firms whose employers offer health insurance may have higher job satisfaction, and are less likely to file a workers' compensation claim out of a sense of loyalty. Other factors that appear to be important factors of filing are education, injury severity, union status, and whether the work-related condition is an illness or an injury. Interestingly, one factor that appears to have relatively little impact on the decision to file is the generosity of workers' compensation benefits. The failure of workers' to file for workers' compensation benefits can have a substantial effect on the adequacy of the income replacement offered by the program. If injured workers do not file then they will not receive benefits, and thus any income losses they face will not be compensated. The results of this project suggest that those workers with the greatest need for support, low-skilled workers without health insurance, are less likely to receive it. This result is tempered somewhat, however, by the fact that workers with more severe injuries are more likely to file.
Statistical-analysis; Demographic-characteristics; Injuries; Workers; Sex-factors; Racial-factors
RAND Corporation, 1776 Main Street, Santa Monica, CA 90407
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Final Grant Report
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Research Tools and Approaches: Social and Economic Consequences
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National Institute for Occupational Safety and Health
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RAND Corporation