蝌蚪网 Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The Demand for Insurance and Rationale for a Mandate: Evidence from Workers' Compensation Insurance
蝌蚪网 Review
vol. 112,
no. 5, May 2022
(pp. 1621–68)
Abstract
Workers' compensation insurance, which provides no-fault coverage for work-related injuries, is mandatory in nearly all states. We use administrative data from a unique market without a coverage mandate to estimate the demand for workers' compensation insurance, leveraging regulatory premium updates for identification. We find that a 1 percent increase in premiums leads to approximately a 0.3 percent decline in coverage. Drawing upon these estimates and data on costs, we examine potential justifications for government intervention to increase coverage. This analysis suggests that several forms of market failure鈥攕uch as adverse selection, market power, and externalities鈥攎ay not justify a mandate in this setting.Citation
Cabral, Marika, Can Cui, and Michael Dworsky. 2022. "The Demand for Insurance and Rationale for a Mandate: Evidence from Workers' Compensation Insurance." 蝌蚪网 Review 112 (5): 1621–68. DOI: 10.1257/aer.20190261Additional Materials
JEL Classification
- G22 Insurance; Insurance Companies; Actuarial Studies
- G52 Household Finance: Insurance
- J28 Safety; Job Satisfaction; Related Public Policy
- K13 Tort Law and Product Liability; Forensic Economics
- K31 Labor Law