Workers' Compensation, Job Hazards, and Wages

Dorsey, Stuart; Walzer, Norman

doi:10.2307/2522935

Cited by 39 publications

(18 citation statements)

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“…Much of the earlier compensating differentials literature in economics examined the trade‐offs firms offered to workers in high‐risk, uncomfortable, or dangerous jobs, usually located in the manufacturing sector, that typically included compensation via higher wages and benefits (e.g., Smith 1979; Brown 1980; Dorsey and Walzer 1983; Dorman and Hagstrom 1998). More recently, sociologists have applied this theory to explain gender differences in earnings where it is proposed that perhaps women earn less than men because they are compensated by other rewards that they value more such as more flexible hours, family‐friendly conditions, or more interpersonal rewards (e.g., Kilbourne et al.…”

Section: Theory Of Compensating Differentialsmentioning

confidence: 99%

Are Small Firms More Beautiful or Is Bigger Better? A Study of Compensating Differentials and Law Firm Internal Labor Markets

Wallace

Kay

2009

The Sociological Quarterly

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Research on the size–job rewards relationship emphasizes extrinsic rewards that are typically more prevalent in large, complex organizations. We examine whether certain intrinsic rewards are more characteristic of small firms and shift the focus from manufacturing industries to professional service (law) firms. We find that small is not entirely beautiful. Smaller firms offer more autonomy but no more challenging work or better coworker relations, whereas larger firms offer lucrative salaries, enhanced benefits, and greater promotional opportunities. Our results challenge the compensating differential explanation whereby large firms offer superior extrinsic rewards to compensate for a shortfall of instrinsic job rewards.

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Section: Theory Of Compensating Differentialsmentioning

confidence: 99%

Are Small Firms More Beautiful or Is Bigger Better? A Study of Compensating Differentials and Law Firm Internal Labor Markets

Wallace

Kay

2009

The Sociological Quarterly

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“…are seriously biased, this conclusion may be erroneous.6 Two papers that do not use solely the income component of benefits are Dorsey and Walzer [10] and Gruber and Krueger [12]. 4.…”

Section: Wage-benefit Tradeoffmentioning

confidence: 99%

“…Dorsey and Walzer [10] include an injury measure, and Gruber and Krueger [12] estimate models within well defined occupational groups. In both studies, attempts are made to hold injuries constant.…”

Section: Wage-benefit Tradeoffmentioning

confidence: 99%

New Estimates of the Labor Market Effects of Workers' Compensation Insurance

Kaestner¹,

Carroll²

1997

Southern Economic Journal

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JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. I. IntroductionThe workers' compensation laws are one of the earliest examples of a government mandated employer provided benefit. Under a combination of federal and state laws, employers have a statutory obligation to provide medical and income benefits to injured workers. In most states, employers are required to purchase insurance to meet their financial responsibility. Recently, there has been growing legislative support for expanding the scope of mandated benefits to include items such as parental leave and health insurance. The political attractiveness of mandated benefits is that they do not require an increase in taxes, and that they represent a political compromise between liberals and conservatives over how best to carry out social policy [22].The labor market consequences of mandated benefits are potentially large and not well documented in the literature. The fundamental issue is to what extent an increase in benefits, which represents an increase in employer costs, is offset by lower wages. Previous studies that have attempted to measure such compensating differentials have reached dissimilar conclusions over the size and even the direction of the effects.' The findings from studies examining the effect of workers' compensation insurance on wages tend to be more consistent, often finding a negative effect, but are also characterized by considerable diversity. Thus, past research does not provide enough information to make an informed policy decision and continued research in this area is clearly warranted. The purpose of this paper is to provide new evidence on the effect of workers' compensation benefits on the labor market. In particular, the paper examines the tradeoff between wages and workers' compensation benefits and the relationship between workers' compensation benefits and job safety. The primary contribution of this paper is to identify two previously overlooked *The authors wish to thank Michael Grossman, Theodore Joyce and seminar participants at the City University of New York Graduate Center for helpful comments. 1. For a general review of the compensating wage differential literature see Smith [20] and Brown [2]. Ehrenberg and Smith [11] review studies of compensating wage differentials for pensions.

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“…In general, the results show substantial impacts of workers' compensation on the wage (except for Butler, 1983). Dorsey and Walzer (1983) find that, for every 1 percent increase in workers' compensation costs, wages decline by 1.4 percent. Moore and Viscusi (1990) conclude that higher compensation benefits, from the employer's perspective, more than pay for themselves.…”

Section: Wage Effectsmentioning

confidence: 84%

Incentive Effects of Workers’ Compensation: A Survey

Fortin

Lanoie

2000

Handbook of Insurance

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This survey covers extensively the theoretical and the empirical work that was done on the incentive effects related to the existence of workers' compensation (WC) in the North American context. It first analyzes the economic rationale for compulsory We. Then it studies the impact of WC on behavior. Three types of effects can be distinguished: 1) WC may influence frequency, duration and nature of claims through a variety of incentive effects. Under asymmetrical information about accident prevention activities, WC may affect safety behavior of both employers and employees and the risk level in the market place. Under asymmetrical information about the true nature of workplace injuries, insured workers may attempt to report false or off-thejob accidents and to undertake activities in order to obtain higher WC benefits, especially in the case of hard-to-diagnose injuries. Moreover, substitution between WC and other insurance programs may be observed. The decision of reporting a workplace accident may also be affected by the generosity of WC benefits. 2) WC may induce changes in occupational wages rates and 3) WC may affect firms' productivity. So far, the literature has focused mainly on the first type of effects. The main results show that increases in WC insurance are associated with an increase in the frequency of injuries (elasticities ranging from 0.4 to I), and with an increase in the average duration of claims (elasticities ranging from 0.2 to 0.5). Furthermore, increases in WC are associated with more reporting of injuries that are hard-todiagnose and, in the same line, there are some evidence (at least in Canada) of substitution between unemployment insurance and WC insurance. Lastly, there are empirical results showing that the presence of WC insurance induces important reductions in wage rates, while an emerging literature suggests that changes in WC insurance may also have negative productivity effects.

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Workers' Compensation, Job Hazards, and Wages

Cited by 39 publications

References 0 publications

Are Small Firms More Beautiful or Is Bigger Better? A Study of Compensating Differentials and Law Firm Internal Labor Markets

Are Small Firms More Beautiful or Is Bigger Better? A Study of Compensating Differentials and Law Firm Internal Labor Markets

New Estimates of the Labor Market Effects of Workers' Compensation Insurance

Incentive Effects of Workers’ Compensation: A Survey

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