Welfare Scarring and Work Related Back Pain: Implications for the Management of Disability

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

Working Papers from East Carolina University, Department of Economics

Abstract: Numerous studies have examined the economic and administrative correlates of the duration of workers= compensation claims, but none have fully controlled for the impact of worker heterogeneity on durations of work absence. Of particular interest are the ways in which worker heterogeneity affects estimates of negative duration dependence, or Awelfare scarring.@ We estimate Weibull models of claim duration for serious low back injuries in which both the location and shape parameters of the duration distribution are functions of claimant characteristics. The results show that duration dependence effects vary systematically with observed worker characteristics and that allowing the shape parameter of the duration distribution to vary among workers significantly changes coefficients of the location parameter as well.

The results imply that work outcomes for job-related injuries could be improved if interventions were targeted to different groups of workers according to the likelihood they will experience negative duration dependence effects rather than the current practice of assuming that service- intensive, early intervention strategies are cost-effective for all injured workers.

Note: For a copy of the paper, e-mail: baldwinm@mail.ecu.edu
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