TY - JOUR
T1 - The durable experiment
T2 - State insurance of workers' compensation risk in the early twentieth century
AU - Fishback, Price V.
AU - Kantor, Shawn Everett
N1 - Funding Information:
The Journal of Economic History. Vol. 56, No. 4 (Dec. 1996). © The Economic History Association. All rights reserved. ISSN 0022-0507. Price V. Fishback is Professor of Economics, University of Arizona, Tucson, AZ 85721, and Research Associate, National Bureau of Economic Research, Cambridge, MA 02138. Shawn Everett Kantor is Associate Professor of Economics, University of Arizona and Faculty Research Fellow, National Bureau of Economic Research. This research has been supported by National Science Foundation Grant No. SBR-9223058, the Earhart Foundation, and the University of Arizona Foundation. Earlier versions of this article were presented at the 1994 Economic History Association meetings, the 1995 NBER-DAE program meeting, and workshops at Northwestern University and the University of Chicago. We thank the participants at those meetings, as well as two anonymous referees, for their comments. Responsibility for the interpretations and shortcomings of the article remains ours. 1Vorys, "State Insurance," p. 14. 2 The major interest groups with a stake in workers' compensation anticipated to benefit from the new legislation. Employers were not particularly bothered by the rise in expected accident benefits because they could pass the extra costs onto workers and the uncertainty of the negligence system was reduced. See Fishback and Kantor, "Did Workers Pay?" Workers gained, even if they paid for the higher benefits through lower wages, because they had limited access to private accident insurance under negligence liability. Workers' compensation provided workers better insurance against workplace accident risk than they could obtain privately under the negligence system. Finally, insurers anticipated an expansion in their coverage of workplace accident risk because the information problems associated with selling employers insurance for their entire payrolls were substantially less than trying to sell accident insurance to individual workers. See Kantor and Fishback, "Precautionary Saving." The natural coalition among workers, employers, and insurers allowed for the rapid and noncontroversial adoption of workers' compensation in the 1910s. Because the support from economic
PY - 1996/12
Y1 - 1996/12
N2 - In the early 1910s state governments debated the private versus public underwriting of workers' compensation risk. The choices they made established the existing system today and set the stage for later debates over the government's underwriting of unemployment, health, and disability risks. This article offers both quantitative and case-study analyses of states' original choices between public and private insurance. Monopoly state funds were adopted in some states because of an unusual combination of strong unions and weak insurance and agricultural interests. In other states, the emergence of progressive political coalitions played the decisive role.
AB - In the early 1910s state governments debated the private versus public underwriting of workers' compensation risk. The choices they made established the existing system today and set the stage for later debates over the government's underwriting of unemployment, health, and disability risks. This article offers both quantitative and case-study analyses of states' original choices between public and private insurance. Monopoly state funds were adopted in some states because of an unusual combination of strong unions and weak insurance and agricultural interests. In other states, the emergence of progressive political coalitions played the decisive role.
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U2 - 10.1017/S0022050700017484
DO - 10.1017/S0022050700017484
M3 - Article
AN - SCOPUS:0000807667
SN - 0022-0507
VL - 56
SP - 809
EP - 836
JO - Journal of Economic History
JF - Journal of Economic History
IS - 4
ER -