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Work Disincentives of Workers' Compensation Permanent Partial Disability Benefits: Evidence for Canada

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  • Douglas E. Hyatt

Abstract

This paper examines the impact of workers' compensation benefits and expected labor market earnings on the postinjury employment status of permanently injured workers. Permanent partial disability benefits in Ontario at the time the data were collected were not related to postinjury labor market earnings and can, therefore, be characterized as having a pure income effect on postinjury employment behavior. The estimation results indicate an elasticity of postinjury employment to workers' compensation permanent disability benefits of -0.15, evaluated for the mean worker. The elasticity of postinjury employment to expected postinjury labor market earnings is about 0.94 percent.

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  • Douglas E. Hyatt, 1996. "Work Disincentives of Workers' Compensation Permanent Partial Disability Benefits: Evidence for Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 29(2), pages 289-308, May.
    • Handle: RePEc:cje:issued:v:29:y:1996:i:2:p:289-308
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    Cited by:

    1. Michele Campolieti & Harry Krashinsky, 2006. "Disabled Workers and Wage Losses: Some Evidence from Workers with Occupational Injuries," ILR Review, Cornell University, ILR School, vol. 60(1), pages 120-138, October.
    2. Bruce Cater & J. Barry Smith, 1999. "Inferring disability from post-injury employment duration," Applied Economics Letters, Taylor & Francis Journals, vol. 6(11), pages 747-751.

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