THE IMPACT OF WORKERS COMPENSATION EXPERIENCE RATING ON EMPLOYER APPEALS ACTIVITY

Worker's compensation experience rating is presumed to create a financ ial incentive for employers to make investments that are expected to r educe the incidence and severity of work place injuries. However, the impact of experience rating may be more comprehensive, encouraging fir ms to take other actions that can reduce their workers' compensation c osts. One of these actions that has raised concern is employer appeals of workers' compensation board decisions. Based on data from Ontario, we find strong evidence that, although the total volume of employer a ppeals is not large, experience-rated employers are more likely to app eal than are non-experience-rated employers. To our knowledge, this is the first empirical study to examine the relationship between experie nce rating and employer appeals; a gap in the literature is noted by E hrenberg (1988).