Precautionary Saving, Insurance, and the Origins of Workers' Compensation

JOURNAL OF POLITICAL ECONOMY, Vol. 104, No. 2, April 1996

Posted: 19 Jun 1998

See all articles by Shawn Kantor

Shawn Kantor

National Bureau of Economic Research (NBER)

Price V. Fishback

University of Arizona; National Bureau of Economic Research (NBER)

Abstract

In this article we test whether the introduction of social insurance has led to a reduction in private insurance purchases and precautionary saving by examining the introduction of workers' compensation. Our empirical analysis is based on the financial decisions of over 7,000 households surveyed for the 1917 19 Bureau of Labor Statistics Cost-of- Living that the presence of workers' compensation at least partially crowded out private accident insurance and led to a substantial reduction in precautionary saving. The introduction of workers' compensation caused private saving to fall by approximately 25 percent, with other factors held constant.

JEL Classification: G22, D91, J33

Suggested Citation

Kantor, Shawn and Fishback, Price V., Precautionary Saving, Insurance, and the Origins of Workers' Compensation. JOURNAL OF POLITICAL ECONOMY, Vol. 104, No. 2, April 1996, Available at SSRN: https://ssrn.com/abstract=3014

Shawn Kantor

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Price V. Fishback (Contact Author)

University of Arizona ( email )

Tucson, AZ 85721-0108
United States
520-621-4421 (Phone)
520-621-8450 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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