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The Effects Of Worker Heterogeneity On Duration Dependence: Low-Back Claims In Workers Compensation

Richard J. Butler, Marjorie Baldwin and William G. Johnson

The Review of Economics and Statistics, 2001, vol. 83, issue 4, 708-716

Abstract: We estimate models of workers compensation claim duration for a sample of Canadian workers with serious low-back injuries. The models extend recent duration research by allowing worker characteristics to affect duration dependence through the nonlocation parameters of the duration distribution. We compare results for modified Weibull models and piecewise-constant hazard rate models of duration dependence. The results show that workers' responses to elapsed claim duration vary significantly with their characteristics and with economic incentives to return to work. Further, allowing for heterogeneity in duration dependence effects can dramatically change the coefficient estimates of the variables that determine the location parameter of the duration distribution. © 2001 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Date: 2001
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The Review of Economics and Statistics is currently edited by Pierre Azoulay, Olivier Coibion, Will Dobbie, Raymond Fisman, Benjamin R. Handel, Brian A. Jacob, Kareen Rozen, Xiaoxia Shi, Tavneet Suri and Yi Xu

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