This report provides, for the first time in convenient form, data and methods needed to examine the nature, size, and adequacy of Workers' Compensation (WC) financial incentives for prevention, and hence to evaluate the conventional wisdom about WC and safety. The report examines the WC financial incentives facing employers, under different insurance arrangements. The findings of the study demonstrate the sensitivity of incentives to the characteristics of each state's WC system, firm size, interest rates, and insurance arrangements. Other conclusions reached include: The conventional wisdom is that self-insured incentives exceed experience-rated insured incentives, but the reverse is often true; retrospective-rated incentives will typically exceed both self-insured and experience-rated incentives; and generalizations about the size of WC financial incentives should be made with great care.
This report is part of the RAND Corporation Report series. The report was a product of the RAND Corporation from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.
This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.