Income Losses of Women and Men Injured at Work
Leslie I. Boden Monica Galizzi
a b s t r a c t
Women and men injured at work in Wisconsin during 1989 and 1990 have similar levels of lost earnings in the quarter of injury. However, in
the three and one-half years after the post-injury quarter, women lose an average of 9.2 percent of earnings, while men lose only 6.5 percent. Even
after accounting for covariates with a variant of the Oaxaca-Blinder- Neumark decomposition, the disparity in long-term losses remains. Differ-
ences in injury-related nonemployment account for about half the covariate-adjusted gap over the four-year post-injury period. Changes in
hours worked may explain all or part of the remaining gap. Gender differ- ences in labor supply appear likely to account for much of the disparity
in losses, but discrimination remains a viable explanation.
I. Introduction
In 1996, firms in the United States reported 6.2 million workplace injuries and illnesses, of which 2.8 million involved restricted work activity or at
least one day lost from work Bureau of Labor Statistics 1997. For many injuries, workers lose little or no time from work and recover fully, returning to their pre-
injury jobs. We would expect their labor-market impacts to be minimal, like the
Leslie I. Boden is a professor of public health at Boston University and Monica Galizzi is an assistant professor of economics at the University of Massachusetts Lowell. This research was supported by the
National Institute for Occupational Safety and Health Research Grant R01 CCR112141 and Re-
search Grant 1R01 OH03751 and the Workers Compensation Research Institute. The authors wish to
thank Jeff Biddle, Tim Heeren, Joni Hersch, Kevin Lang, Austin Lee, Bob Reville, and participants in the Workers’ Compensation Research Group for their helpful comments and suggestions. The adminis-
trative data used in this article can be obtained beginning February 2004 through January 2007 from Leslie I. Boden, Boston University School of Public Health, 715 Albany St., Boston, MA 02465 lboden-
bu.edu. [Submitted February 2000; accepted April 2002]
ISSN 022-166X
2003 by the Board of Regents of the University of Wisconsin System T H E J O U R N A L O F H U M A N R E S O U R C E S • X X X V I I I • 3
impact of a short-duration flu. However, recent studies have shown that substantial losses may extend far past the date of full physical recovery Boden and Galizzi
1999; Reville 1999; Biddle 1998. In a recent study of workplace injuries in Wisconsin, we found that women’s
losses in the quarter of injury are similar to those of men, but in the three years after the post-injury quarter, women lose a larger proportion of earnings than men do
Boden and Galizzi 1999. In the same study, we also found that workers’ compensa- tion benefits replace a substantially smaller proportion of losses for women than for
men.
1
This made us wonder whether injured women are discriminated against rela- tive to injured men. If this were true, it would imply that injured women suffer
doubly from employment discrimination: both before they are injured—as has been discussed in the rich literature about gender discrimination—and then when they
return to the labor market after recovery.
Why might an injury trigger employer discrimination? Even if employers do not discriminate deliberately, they usually have limited information about workers’ attri-
butes. Therefore, they may end up preferring workers for whom they can obtain more accurate predictions of skills or mobility behavior Aigner and Cain 1977. In
this context, signals can play a large role. A woman’s workplace injury can reinforce existing employer beliefs about the superior work capacity and productivity of men
or about the need to ‘‘protect’’ women from the hazards of work. Alternatively, employers may be more confident of men’s labor-force attachment. They may be
more willing to believe that time off work is truly injury-related for men. Therefore, employers may see women’s injuries as a signal of low commitment to the job, of
limited ability, and even of greater future injury risk. Further, several studies have indicated that women are often employed in less capital-intensive jobs and in jobs
that involve little on-the-job training Altonji and Spletzer 1991; Barron, Black, and Lowenstein 1993; Royalty 1996; Kuhn, 1993; Olsen and Sexton, 1996. This suggests
that women may be easier to replace once they are off work because of an injury.
In a 1997 paper, Mavromaras and Rudolph discuss opportunities for employer discriminatory behavior during the hiring process, noting that ‘‘if employers wish
to discriminate, the hiring point is where such a practice can be best concealed p. 814.’’ For injured workers who are not rehired, if potential future employers want
to discriminate against injured workers, this discrimination may be very difficult to detect. Even when injured workers do not lose their jobs, their injuries can provide
employers with opportunities to act outside the purview of antidiscrimination laws. If a worker incurs a long period of work loss or if an injury has caused a long-term
decline in productivity, the pre-injury employer may decide to hire a replacement instead of reemploying the injured worker. The employer may exercise considerable
discretion in evaluating both the extent of productivity decline and the value of re- placing the injured worker. Similar discretion allows the employer to place the re-
turning worker in a lower-paying job or to bypass the injured worker when promotion opportunities arise. Thus, it is potentially easier for the employer to engage in dis-
criminatory behavior toward current workers who have been injured than toward those who are not.
1. In that study, because losses remained substantial at the end of the study period, losses were projected ten years past the observed period. After-tax replacement rates were 64 percent for men and 50 percent
for women.
These circumstances are similar to those facing displaced workers. Both injury and displacement involve a period off work related to an exogenous event, both
involve a loss of human capital and consequently in wages, and both present the possibility that employers will discriminate in decisions about reemployment.
2
A range of studies has found that displaced women with similar characteristics lose a
greater proportion of pre-injury earnings than do men Ruhm 1987; Podgursky and Swaim 1987; Jacobson, LaLonde, and Sullivan 1993; Crossley, Jones, and Kuhn
1994. The parallel between displacement and injury and the initial findings of gender differences in losses from workplace injuries lead us to pursue this issue.
We begin by estimating losses for men and women separately, using a difference- in-differences approach: Given the characteristics of our data, we calculate differ-
ences between post-injury earnings of a comparison group and of injured workers. Next, we attempt to determine which factors can explain the observed differences.
We examine the extent to which observed personal, job, employer, and injury charac- teristics account for gender disparities. To do this, we apply an extension of the
Oaxaca-Blinder decomposition Oaxaca 1973; Blinder 1973, as refined by Neumark 1988 and Oaxaca and Ransom 1994. We use this to evaluate the difference be-
tween expected male and female injury-induced changes in earnings and to calculate ‘‘nondiscriminatory’’ changes in earnings. We can measure not only gender differ-
ences in losses but also the extent to which men appear to gain from favoritism ‘‘nepotism’’, and women appear to lose from discrimination.
After accounting for gender disparities in observed covariates, we use additional information to see whether the differences that remain can be explained by hypothe-
ses other than discrimination. We first estimate the impact of workplace injuries on the probability of being employed having positive earnings in a given post-injury
quarter and examine the impact of nonemployment on earnings disparities. We then consider alternate factors that may contribute to women’s losses, using both our
primary data set and additional data from a survey of a stratified random sample of 1,461 workers with back injuries from the same population. Here, we look for evi-
dence that differential injury severity, reduced hours of work, withdrawal from the labor force, greater loss of job-specific human capital, loss of compensating wage
differentials, more reinjury, and longer recovery times contribute to the observed gender differentials.
II. Data
