Little is known about how well individuals are compensated for injuries. This study uses data from a 1989 survey to estimate both the lifetime costs and compensation for injuries. Its findings show that about 55% of the cost is compensated by public or private programs. Compensation rates are lower for disabling injuries and those of long duration. The results also suggest that compensation system reforms that would place stricter limits on maximum compensation might not be a distributionally fair solution. The reasons are that costs are highly skewed, and the share of costs recovered by compensation programs is currently lowest for injuries that are long-term, disabling, and the most expensive.
Originally published in: Inquiry, v. 36, no. 3, Fall 1999, pp. 244-254.
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