When to Start a Fight and When to Fight Back: Liability Disputes in the Workers' Compensation System / David Card, Brian P. McCall.

Format:

Book

Author/Creator:

Card, David.

Contributor:

National Bureau of Economic Research.

McCall, Brian P.

Series:

Working Paper Series (National Bureau of Economic Research) no. w11918.

NBER working paper series no. w11918

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

When to Start a Fight and When to Fight Back

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2006.

Summary:

Despite the adoption of no-fault Workers' Compensation legislation in most states, there is substantial litigation over the issue of employer liability for injury claims. We develop a sequential asymmetric information model of liability disputes and estimate the model using data on injury claims from the state of Minnesota. The key insight of our model is that when workers differ in their costs of pursuing a injury claim, employers have an incentive to deny liability and force those with higher costs to abandon their claim. Likewise, workers who expect a bigger return from pursuing their claim are more likely to fight back when liability is denied. Estimates of the structural model confirm that the decision rules of both parties depend on the expected costs and benefits of continuing the dispute. The model provides a parsimonious but relatively successful explanation for the distribution of liability disputes across different workers and types of injuries.

Notes:

Print version record

January 2006.