News Release
FOR RELEASE
February 8, 2002
RAND INSTITUTE FOR CIVIL JUSTICE MEMO TO EDITORS AND REPORTERS
NEW RAND STUDY ON WORKERS' COMPENSATION IN CALIFORNIA
The latest in a series of RAND reports on workers' compensation in California will be released at a meeting of The California Commission on Health and Safety and Workers' Compensation (CHSWC), who sponsored the research, on Friday, February 8.
Like RAND's other reports on workers' compensation, Trends in Earnings Loss from Disabling Workplace Injuries in California: The Role of Economic Conditions, by Robert T. Reville, Robert F. Schoeni, and Craig W. Martin confirms that, despite some improvements in the mid-1990s, benefits in the state are still inadequate. For those who suffer from permanent partial disabilities, the replacement of lost wages over a 10-year period remains below one-half of earnings lost, which is well below the standard of two-thirds replacement invoked in evaluations of adequacy.
This study is particularly timely since the California Legislature passed a bill on Monday intended to address this problem by significantly increasing workers' compensation benefits in the state.
Key findings:
- The situation of disabled workers in California improved between 1991 and 1997. Their average benefits over five years after their injury increased as a percentage of their lost wages from 52 percent in 1991 to 58 percent by 1997. Although the improving economy had a slight effect on this increase, two other factors were more significant: the 1993 reforms to the state's workers' compensation system that raised benefits and the fact that employers recognized they could control the costs of workers' compensation by increasing their use of "return-to-work" policies and rehiring more disabled workers.
- Workers whose injuries were less severe showed the greatest gains during this period. They are also the easiest for employers to accommodate through return-to-work programs. In contrast, the most disabled claimants experienced no change in outcomes—and may have even lost ground—from 1991 to 1997.
- Although injured workers in the aggregate fared better in the mid-1990s, the study predicts that workers injured today are likely to be worse off than workers injured in the mid-1990s. Benefits have remained fixed in nominal terms since 1996, and have actually declined in real terms due to inflation.
About the RAND Corporation
The RAND Corporation is a nonprofit research organization providing objective analysis and effective solutions that address the challenges facing the public and private sectors around the world.
Learn More
Top