The growth of Government is the most dramatic, yet least understood, change in the American economy in the last century. While most studies have focused on the growth of the federal government, state governments also expanded rapidly and often experimented with programs that were later introduced at the federal level. The purpose of this research is to better understand the role of the states in the growth of government by analyzing the adoption of workers' compensation, America's first major social insurance program. The research will combine both macro analysis of the timing of adoption of workers' compensation with detailed and quantitative case studies of the passage of the laws in several important states. The extent to which workers' compensation benefitted or harmed various groups will be estimated, including workers of various skill levels, unionized workers, employers of different sizes and different accident experience, insurance companies, taxpayers, and state officials. Based on these empirical estimates, how groups and individuals translated their expected economic returns into political action will be analyzed. This research is important because it will provide a better understanding of the interaction of the economic and political systems in the development of the American economy.
