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Workplace Accident Compensation Reform A Reappraisal
Author(s) -
McEwin R. Ian
Publication year - 1988
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/j.1467-8462.1988.tb00542.x
Subject(s) - rigour , compensation (psychology) , incentive , government (linguistics) , payment , work (physics) , actuarial science , financial compensation , public economics , workers' compensation , accident (philosophy) , economics , business , labour economics , finance , psychology , engineering , social psychology , market economy , mechanical engineering , linguistics , philosophy , geometry , mathematics , epistemology
Despite the considerable time and money spent by various states investigating mounting financial problems in workers' compensation in recent years, we still do not know very much about the causes of the problems. An important reason for this has been that the debate in Australia has suffered from a number of misconceptions and lack of analytical rigour. This article outlines how some basic economics can provide a framework for analysing many issues in the workers' compensation debate. In doing so the analysis casts doubt on a number of conventional wisdoms, particularly the belief that employers pay for workers' compensation and the assumption that current levels of government involvement in worker disability insurance arrangements are justified. In addition, data from New South Wales are presented that suggest the main reason for increased costs is higher income maintenance payment per claim. As with overseas experience, higher benefit levels appear to give workers more incentive to stay away from work and make claims for injuries whose severity is harder to measure.