NB19-16:The Long-Term Effects of Workplace Injuries on Labor Force Exit, DI Eligibility, and Early Retirement

Workplace injuries represent a major risk to the health and economic security of workers and their families. Workers injured at work have substantially lower labor force participation rates and earnings even several years after injury, placing them at increased risk of transitioning to DI or, for older workers, early retirement. In this project, we will use workers' compensation data to study the long-term effects of injury and illness on labor force exit rates.
While previous work has estimated the relationship between workplace injuries and labor market outcomes 2-3 years post-injury, there is little evidence about the longer-term effects, which are more indicative of the burden placed on DI. Moreover, prior work has not studied the incidence of early retirement due to injuries and or the role of local economic conditions.
We will compare long-term labor outcomes of workers suffering injuries at work to workers at the same firm with similar pre-injury earnings and tenure. Our deliverable is an economics paper quantifying these long-term workplace injury consequences. Our aims are to:
• Compare long-term labor outcomes for injured workers to a matched control group
• Test whether injuries at ages 55+ increase labor force exit rates at early retirement age
• Study how economic conditions and job characteristics, including pre-injury wages and job demands, modify the impact of injury