Modern US Workers’ Compensation and Work-Related Injury: No Evidence of Moral Hazard

Emiliano Huet-Vaughn and Youssef Benzarti

No 28187, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We exploit recent decades of US state-level reforms to the generosity of workers’ compensation programs to estimate the associated moral hazard, utilizing an event- study design and analyzing 9 separate reform categories. The reforms vary - some affecting benefit size, some the probability of receiving benefits; some paid in cash, some in-kind; some constituting increases, some decreases, in generosity. Across the board, we find no evidence of resulting changes in workplace injuries, and, generally, can rule out even moderate moral hazard responses for severe and less severe injuries, suggesting a key moral hazard cost of workers’ compensation benefits is negligible.

JEL-codes: H0 (search for similar items in EconPapers)
Date: 2020-12
Note: PE
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Citations: View citations in EconPapers (1)

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