Association for Public Policy Analysis & Management

Panel: Intersections Between Health, Labor and Workers' Compensation

(Poverty and Income Policy)

An unexpected health problem can have long-term consequences on an individual’s financial and physical health, and these consequences can be amplified or mitigated by other issues in the economy. Workers’ Compensation (WC) is a state-based social insurance program designed to provide cash and medical benefits to workers who were injured on the job. With annual expenditures topping $60 billion in 2014, an amount nearly twice as large as annual expenditures on Unemployment Insurance in the same year (NASI 2016, Department of Labor 2015), this program plays an important role in reducing the negative consequences of an unexpected illness or injury. Using administrative WC data from multiple states, each paper on this panel provides a unique perspective on the implications of a work-disabling health shock in a broader policy context. First of all, appropriate medical interventions are an integral part of recovery, and can themselves affect an individual’s work capacity. The first paper examines the effect of an authorization requirement for certain costly and abuse-prone drugs on prescription drug use, medical treatment, and health care costs for work-related injuries in Texas. Secondly, alternative income supports can be an important factor in how long an individual can afford to stay away from work and recover, and can also affect the success of the recovery over the short and long term. The next paper exploits variation around a kink in the WC benefit schedule to investigate the effect of benefit generosity on claim duration and temporary benefits paid among temporary disability claims in Oregon. The final paper analyzes related issues for permanent disabilities that affect claimants’ health over the longer term. This paper exploits a policy change in permanent disability payments to study how unconditional WC payments in Oregon affect claimants’ recovery time, and whether more generous payments lead to more successful returns to the labor market, or encourage permanent labor market exit and participation in SSDI. Together, these papers compile snapshots of the effect of workplace disability from around the country, and inform the extent to which public intervention can improve outcomes for workers facing this risk.