Workers compensation Wages

Viscusi, W.K. and Moore, M.J. (1987). "Workers Compensation Wage Effects, Benefit Inadequacies, and the Value of Health Losses," Review of Economics and Statistics 69(2) 249-61. 

Ehrenberg, Ronald G. (1988). "Workers compensation, wages, and the risk of injury." In John F. Burton, Jr. (ed) New Perspectives in Workers Compensation. Ithaca, NY Cornell Industrial and Labor Relations Press. 

Workers compensation benefits pay workers for medical expenses and lost wages due to occupational injury or illness. In exchange for carrying workers compensation insurance, companies are protected against legal... 

The practice of what is included in the wage amount is coordinated with the finding of the overhead. Fringe additions could include effects of paid holidays and vacations, health insurance and retirement benefits. Federal Insurance Contributions Act (FICA) benefits, workers compensation, bonuses, gifts, uniforms, special benefits, profit sharing costs, education, and so on. 

For Marx, market transactions occupy a middle layer in the hierarchy of capitalist social relations the injustice of the system becomes apparent only below and above it, within the coercive production process by which labor-power, the ability to work, is transformed into actual labor, and at the level of the entire structure, where surplus value is transformed into profit. Although Marx disputed the invisible hand postulate on the grounds that day-to-day price fluctuations are not an adequate guide to production and distribution, he never claimed that market relations themselves are responsible for exploitation. The grisly record of injuries and diseases in British factories impressed Marx as characteristic of capitalist production - workers as raw material for the owners to use up - yet his bifurcated vision crippled Marx when he confronted Smith on this issue. The theory of compensating wage differentials pertains to the labor market, that realm of Freedom, Equality, Property and... 

If there were a single labor market, in which workers could compete equally for all available jobs, and if all jobs were identical except for the risk involved, all we would need to know in order to estimate compensating wage differentials would be the riskiness of each job and how much it pays. Of course, these assumptions are not valid so we need to know a great deal more. To correct for the fact that there are many labor markets we need to know more about worker characteristics from these we can determine which jobs make up each worker s reference set (alternatives for comparison). Since jobs differ in many ways other than safety, and since these differences are correlated with safety (as we saw in chapter 1), we should also incorporate more job attributes in our analysis. ... 

Finally, over the course of this chapter we have seen increasingly sophisticated attempts to overcome the problems which bedevil hedonic wage analysis. From simple, unadorned wage regressions we moved to partitioned samples, inclusion of workers compensation benefits, canonical correlation to test for implicit bias, and an estimation of the likelihood of job-switching to circumvent the difficulties connected with unemployment. It is true that these more refined methods yield results... 

Workers compensation is Just such a system. It provides mandatory no-fault disability and death coverage for injuries and, to a lesser extent, illnesses arising on the job, financed entirely by employer contributions. To the extent that it is experience-rated, each employer s payment into the system is equal to the anticipated claims of his or her workers (tt c). All of the provisions of workers compensation are well-known in particular, workers can know with a high degree of certainty with what likelihood and to what extent they will be compensated in the event of an accident on the job. Thus the conventional economic view, predicated on the market determination of wages and working conditions, predicts that neither employers nor workers should care one way or another about the existence of the workers compensation system or the benefits it provides. 

We are now in a position to ask whether workers will receive compensating wage differentials in the presence of unemployment. The following model suggests some surprising answers. As in chapter 2 we will assume that all workers are identical in both preferences and abilities. 

An additional wrinkle is possible each time the game is played the payoffs may change as new work practices or production materials are introduced. Employers, of course, will be unwilling to pay fully compensating wages for risks that workers have a substantial chance of mitigating over the duration of the contract. 

Arnould, Richard J. and Len M. Nichols. 1983. Wage-Risk Premiums and Workers Compensation A Refinement of Estimates of Compensating Wage Differentials. Journal of Political Economy. March 332-40. 

Dorsey, Stuart and N. Walzer. 1983. Workers Compensation, Job Hazards, and Wages. Industrial and Labor Relations Review. July 642-54. 

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