Does Workers' Compensation Encourage Hard to Diagnose Injuries?

29 Pages Posted: 11 Dec 1996

See all articles by John W. Ruser

John W. Ruser

Government of the United States of America - Office of Productivity and Technology

Date Written: August 1996

Abstract

Worker-generated claims reporting moral hazard is said to occur when, in order to collect workers' compensation benefits, workers report on-the-job injuries that never occurred or that occurred off-the-job. Using newly available injury micro data from the Bureau of Labor Statistics, this paper assesses the hypothesis that claims reporting moral hazard is more likely to occur for hard to diagnose injuries, such as back sprains and carpal tunnel syndrome, than for easy to diagnose cuts and fractures. Multinomial logits are estimated to control for a wide variety of worker, job, and establishment characteristics that are correlated with the distribution of injuries. When the only workers' compensation variable included in the analysis is the wage replacement rate, general support for the hypothesis is found. However, results are less strong, though not contradictory, when controls for the waiting period and for who get to choose the doctor are introduced into the analysis.

JEL Classification: J28

Suggested Citation

Ruser, John W., Does Workers' Compensation Encourage Hard to Diagnose Injuries? (August 1996). Available at SSRN: https://ssrn.com/abstract=521 or http://dx.doi.org/10.2139/ssrn.521

John W. Ruser (Contact Author)

Government of the United States of America - Office of Productivity and Technology ( email )

2 Massachusetts Avenue, NE
Washington, DC 20212
United States
202-691-6304 (Phone)

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