Permanent Partial Disability in Workers' Compensation: Probability and Costs

Two samples of administrative records from state workers’ compensation programs are used to investigate factors explaining the probability of a permanent partial disability conditional on a compensation claim and the size of the award conditional on a permanent partial disability. The probability of a permanent partial disability is found to be positively related to the level of weekly permanent partial disability benefits as well as the potential duration of benefits. In addition, the process of determining whether compensation claimants receive a permanent partial award is independent of and different from the process determining the size of the award. KEY WORDS: workers compensation, reserving.