Is Workers' Compensation Disguised Unemployment Insurance?
This paper examines how yhe Workers' Compensation (WC) and the Unemployment Insurance (UI) programs interact to influence the duration of claims due to workplace accidents. We use longitudinal WC administrative micro-data on more than 30,000 workers in the Quebec construction industry for the period 1976-1986. Our results show that a reduction in the UI wage replacement ratio is associated with an increase in the duration of claims due to serve accidents that are difficult to diagnose (this category includes severe back-related problems). Also, an increase in the WC replacement ratio leads to an increase in the average duration of claims due to minor accidents that are difficult to diagnose (this category includes minor low-back injuries). Moreover, there seems to be an important seasonal effect in the duration of claims; i.e., the average duration of spells on WC is estimated to be 21.2% higher when an accident occurs in December rather than in July.[ - ]