The Impact of a Disabling Workplace Injury on Earnings and Labor Force Participation

by Robert T. Reville

When a workplace injury leaves a worker with a physical impairment that reduces his or her ability to work, the worker is eligible for permanent partial disability (PPD) benefits in California. In this article, the author estimates the lost earnings of PPD claimants in California over four to five years following an injury, and estimates the fraction of the earnings loss that is replaced by workers' compensation indemnity benefits. To examine the long-term wage losses of injured workers, the study employed a unique database of workers' compensation claims that was linked to quarterly wage data, before and after injury, that are maintained by the California state agency administering unemployment insurance. The author reports the research results on earnings loss and wage replacement for a full sample of PPD claimants and reports the results by severity of the disability as measured by disability rating.

Originally published in: The Creation and Analysis of Employer-Employee Matched Data, pp. 147-172.

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