Duration of Non-Work Spells in the Workers' Compensation Insurance System: Unionized vs. Non-Unionized Workers

This paper analyzes the effect of unions on the duration of non- work spells of claimants in the workers' compensation insurance system. It has been argued that a union may affect the duration of non-work spells in two ways. First, a union may alter the true level of workplace safety and, in turn, affect both the frequency and severity of work-related injuries ('true safety' effect). Second, a union may influence workers' incentives to file claims or stay in the system for the longer non-work spell ('claims-reporting moral hazard' effect). This study analyzes 9,818 workers' compensation claims filed with the Minnesota Department of Labor and Industry for injuries that occurred in 1993 and 1994 in 873 sample firms included in the Minnesota Human Resource Management Practice (MHRMP) Survey. To correct for the right-censoring data problem, we use a maximum likelihood estimate of duration of nonwork spells using the Weibull distribution. Empirical results show that being a union member is associated with a 19% increase in the duration of non-work spells. This means that, on average, the non-work spells are approximately ten days longer for workers from unionized firms as compared to their non-unionized counterparts in the sample of this study.