The long-term objective of this project is to investigate the social and economic consequences of work- related injury and illness. The project has two components. Part 1 will focus on two cohorts of individuals sustaining a permanent impairment arising from a work-related accident- one cohort receiving benefits from an impairment based benefits program and the other form a loss-of-earnings-capacity based benefits program. There are two related objectives of this section of the research plan: 1) to better understand the adequacy and equity of two markedly different wage-loss compensation programs for individuals sustaining a permanent impairment; and 2) to determine whether there are significant differences In labor-market reentry and earnings experiences post-accident between individuals receiving benefits from one of the two programs. Part 2 will focus on individuals experiencing a temporary work disability arising from a work-related accident and will investigate the long-term labour-market earnings of these individuals. The objectives of this research agenda are: 1) to determine if there are long-term earnings losses for individuals experiencing only a temporary work disability, and 2) to determine what factors may modify or magnify the impact of temporary disability on long-term earnings. The analysis will be undertaken on a large longitudinal data set that identifies income sources and amounts for individuals and their families over an 18 year time period from 1982 to 1999. Two analytical methodologies will be employed. The first is a matched event/control cohort design in which individuals who experience the event of interest (permanent impairment/short-term disability) will be matched with up to 10 controls (individuals with similar characteristics who do not experience work disability). Analyses of the various questions will be undertaken by comparing the event group with their control counterparts. The second methodology is econometric modelling of the factors that determine labour-market earnings of individuals. The modelling will control for socio-demographic and economic characteristics at the individual level that may bear on labour-market earnings in addition to the work-disability characteristics (extent of impairment, duration of short-term disability spell), the type of benefits program (relevant only for the two permanent disability programs), and unobserved individual-level fixed effects. This research will be invaluable to the development of workers' compensation policy in jurisdictions across North America. The research in Part 1 will inform policy on the relative merits of two approaches to compensating wage losses arising from permanent impairment. The research in Part 2 will provide valuable insight into whether it is appropriate to treat temporary disability as a short-term phenomenon.
