Cj. Bruce et Fj. Atkins, EFFICIENCY EFFECTS OF PREMIUM-SETTING REGIMES UNDER WORKERS COMPENSATION - CANADA AND THE UNITED-STATES, Journal of labor economics, 11(1), 1993, pp. 190000038-190000069
We develop a model in which it is predicted that more resources will b
e devoted to safety in a workers' compensation system with experience-
rated premiums than in one with flat-rated premiums. We test this mode
l by observing the effect on fatality rates of the move from flat rati
ng to experience rating in the forestry and construction industries of
Ontario, Canada. The evidence provides strong confirmation of the the
ory.