How effective are employer return to work programs?

• Published in: International review of law and economics 2017-10, Vol.52, p.58-73
• Main Authors: McLaren, Christopher F., Reville, Robert T., Seabury, Seth A.
• Format: Article
• Language: English
• Subjects: Duration analysis; Return to work; Self-insurance; Workers’ compensation; Workplace injuries
• ISSN: 0144-8188; 1873-6394
• DOI: 10.1016/j.irle.2017.08.003

•We study the impact of employer-based Return to Work programs at large, self-insured firms.•Return to Work programs generated positive returns by reducing time off work after a workplace injury.•Modifying work equipment was the most effective RTW program component.•Programs had the greatest impact on men and workers with a permanent disability.•Short-term benefits were not nullified by long-term adverse employment outcomes. Reducing the recovery time for workers who are injured or disabled by a workplace accident is a key policy goal. This has motivated the promotion of employer-based return to work programs, despite a lack of systematic evidence on the effectiveness of such programs. We combine data on duration of time out of work for workers’ compensation claimants with information on employer return to work programs to estimate the impact of the programs on time out of work. Discrete-time hazard estimates suggest that the workers in a program return approximately 1.4 times sooner compared to workers injured at a firm without a program. The biggest reductions in work-injury absence are experienced by men, likely due to occupational differences, and by workers with a permanent disability. Modifying work equipment is associated with the greatest reductions in injury durations relative to other program components. Back-of-the-envelope calculations indicate that these programs are cost-effective for large, self-insured employers. More work is needed to determine whether these programs could be adopted successfully by smaller firms.