Health Economics Commons^™

Medical Care Spending And Labor Market Outcomes: Evidence From Workers' Compensation Reforms, David Powell, Seth Seabury

David Powell

This paper studies the effectiveness of medical care spending on improving labor outcomes. Injuries sustained at work represent large income and welfare losses to households and there is a significant policy interest in reducing these burdens. Workers' compensation program is a large government program which provides monetary and medical benefits to injured workers. Despite the potential importance of medical care in improving the health and labor productivity of injured workers, little research has addressed the relationship between medical care provided through workers' compensation and post-injury labor outcomes. This paper exploits the 2003-2004 California workers' compensation reforms which reduced medical care …