A study from the Workers Compensation Research Institute has found that 10 years after an injury, the average worker received just 88 percent of the earnings and income an uninjured worker would have received.

The study, which bases its analysis on a Michigan-based program, looks to find the answers to these questions: how the total income that workers receive after an injury from benefits and earnings compares with what workers could have earned without an injury; whether the adequacy measures differ by subgroups with different durations of disability; and how many workers experience large declines in total income after an injury, and how that compares with what is observed for comparable workers without an injury.

It finds earning losses differ between workers who never returned to work and workers who did return to work and either kept working consistently after an injury, worked sporadically postinjury or worked initially postinjury but later stopped working entirely.

The study measures the adequacy of workers’ compensation income benefits by presenting the earnings replacement rate — the percentage of the earnings “uninjured” workers would have gotten that was replaced by income benefits plus postinjury earnings. The higher this percentage, it says, the greater the adequacy of income benefits.

The intent in measuring the earnings replacement rate, it adds, is “to improve policymaker understanding of how well systems served injured workers in this respect in the past and to create a useful statistical tool for future assessments of income benefit adequacy.”

For workers who were on temporary disability, the system worked far better than it did for permanently or partially disabled workers or for those who received lump-sum payments. Employees who went out on temporary disability for up to 12 months were projected to have a total income of 91 percent to 95 percent of non-injured employees’ earnings.

But for those permanently or partially disabled workers, or those receiving lump-sum payments, total income was only 69 percent of income for non-injured workers.

The study also finds that after returning to work, only 44 percent of workers out on temporary disability for more than one month stayed continuously employed. Another 31 percent only worked sporadically, and 21 percent had no meaningful return to work, or only short-term, erratic employment.

The authors conclude that, in light of the occurrence and earnings effect of sporadic employment after initial return to work, it’s important to consider policies that strengthen employment in the intermediate postinjury term and that help workers maintain employment after they first return to work.

Instant Insights /

Workers&rsquo; comp benefits don&rsquo;t replace full income over years

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Workers’ comp benefits don’t replace full income over years