Workers' Compensation, Job Hazards, and Wages

Stuart Dorsey and Norman Walzer

ILR Review, 1983, vol. 36, issue 4, 642-654

Abstract: Competitive theory implies that compensating wage differentials will be paid to workers in hazardous employment, but only to the extent that employees are liable for risk. This prediction suggests that previous estimates of wage-risk premiums may be biased as a result of the failure to control for variations in workers' compensation benefits across states. The authors of this paper test an empirical model of compensating wage differentials that includes a measure of employer liability. For nonunion workers, they find that significant wage premiums are paid for an increased probability or severity of nonfatal injury; a slight downward bias in these estimates results from omitting the liability variable; and increases in employers' costs of workers' compensation are offset dollar-for-dollar by reduced wages. For union workers, however, the evidence on compensating differentials is mixed, and there is no suggestion of a trade-off between wages and the costs of workers' compensation.

Date: 1983
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://ilr.sagepub.com/content/36/4/642.abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:ilrrev:v:36:y:1983:i:4:p:642-654

Access Statistics for this article

More articles in ILR Review from Cornell University, ILR School
Bibliographic data for series maintained by SAGE Publications ().