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Employment, Wage, and Accommodation Patterns of Permanently Impaired Workers

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  • Cater, Bruce I

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.

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  • Cater, Bruce I, 2000. "Employment, Wage, and Accommodation Patterns of Permanently Impaired Workers," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 74-97, January.
    • Handle: RePEc:ucp:jlabec:v:18:y:2000:i:1:p:74-97
    DOI: 10.1086/209951
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    References listed on IDEAS

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    1. Morley Gunderson & Douglas Hyatt, 1996. "Do Injured Workers Pay for Reasonable Accommodation?," ILR Review, Cornell University, ILR School, vol. 50(1), pages 92-104, October.
    2. Richard J. Butler & William G. Johnson & Marjorie L. Baldwin, 1995. "Managing Work Disability: Why First Return to Work is Not a Measure of Success," ILR Review, Cornell University, ILR School, vol. 48(3), pages 452-469, April.
    3. Paul Milgrom & Sharon Oster, 1987. "Job Discrimination, Market Forces, and the Invisibility Hypothesis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(3), pages 453-476.
    4. Michael Waldman, 1984. "Job Assignments, Signalling, and Efficiency," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 255-267, Summer.
    5. Bruce C. Greenwald, 1986. "Adverse Selection in the Labour Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(3), pages 325-347.
    6. Lorne Carmichael, 1983. "Firm-Specific Human Capital and Promotion Ladders," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 251-258, Spring.
    7. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-1284, December.
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    Cited by:

    1. Bruce Cater & Sohee Kang & Byron Lew & Marco Pollanen, 2013. "Permanent Injury and the Disability-Mitigating Effects of Education," Economics Bulletin, AccessEcon, vol. 33(3), pages 2064-2079.

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