Employment, Wage, and Accommodation Patterns of Permanently Impaired Workers

Bruce I Cater

Journal of Labor Economics, 2000, vol. 18, issue 1, 74-97

Abstract: This paper offers an explanation of the postinjury employment, wage, and accommodation patterns of permanently impaired workers. In particular, it argues that the observed tendency of time-of-accident employers to rehire at the preinjury wage, accommodate, then, perhaps, quickly terminate the impaired worker, is a manifestation of the workers' preferred contract. That contract is characterized by wage inflexibility. By removing the opportunity for the postinjury employer to underreport productivity, this contract creates an incentive for the worker to attempt to functionally adapt to the impairment, thereby increasing expected lifetime utility. Copyright 2000 by University of Chicago Press.

Date: 2000
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