Inferring disability from post-injury employment duration

Bruce Cater and Barry Smith

Applied Economics Letters, 1999, vol. 6, issue 11, 747-751

Abstract: The paper examines the extent to which occupational-injury-induced permanent impairment translates into work-related disability. While most permanently impaired workers return to their time-of-accident employer, job and wage, these workers then experience high initial rates of turnover. This turnover can be seen as a manifestation of the dynamics of information, as the time-of-accident employer re-employs the impaired worker, then 'tests' his/her post-injury productivity in order to resolve initial uncertainty regarding the impairment's impact. These turnover patterns can, accordingly, be utilized as a source of disability inference. A statistical model based on the notion of sequential testing is derived and confronted with data reflecting the post-injury labour market experiences of permanently impaired workers.

Date: 1999
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DOI: 10.1080/135048599352330

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