Examines post-injury employment, earnings losses, and the adequacy and equity of benefits for New Mexicans with permanent partial disabilities, and compares the results to workers injured in four other states.

The New Mexico workers' compensation system has been widely regarded as a success story since it was significantly reformed a decade ago. Workers' compensation costs for the state's employers are among the lowest in the country, insurer profits are among the highest, and the system is among the least litigious. Given this environment, this book evaluates the adequacy and equity of workers' compensation indemnity for New Mexico workers receiving permanent partial disability benefits. The authors compare outcomes for workers with partially disabling occupational injuries in New Mexico with outcomes for their counterparts in California, Washington, Oregon, and Wisconsin. After controlling for differences across the five states, New Mexico's replacement rates fall in the middle; however, benefits for sustained earnings losses are not adequate by the commonly cited standard of two-thirds pre-tax wage replacement. Scheduled injuries, which include primarily injuries to the arms and legs, are less adequately compensated than unscheduled injuries, which are primarily injuries to the back. The duration of time until an employee's return to work in New Mexico is much longer than that in other states, which may be accounted for by the other states' active return-to-work programs.

This document, current through 1986, contains four parts. Part I presents a conceptual framework used to view disability among the working age population; the rudiments and objectives of workers' compensation programs; and an explanation of the criteria of adequacy, equity, and efficiency as used in the report. Part II presents a study of 10 jurisdictions: California, Florida, Michigan, Nevada, New Jersey, New York, Ohio, Pennsylvania, Wisconsin, and the District of Columbia. It examines the states' procedures for permanent partial disability benefits and the criteria used by the states for scheduled benefits and for nonscheduled benefits. Part III examines the relationships among workers' disability ratings, workers' compensation benefits, and their actual losses of earnings caused by work-related injuries in California, Florida, and Wisconsin. Part IV evaluates the adequacy, equity, and efficiency of the permanent partial disability benefits in the jurisdictions examined and concludes with a discussion of possible reforms for permanent disability benefits in workers' compensation. An 8-page bibliography is included as well as an alphabetical index, 42 tables, 2 charts, and 6 graphs. (CML)

This volume summarizes a comprehensive empirical analysis of the permanent partial disability component of California's workers' compensation system. Established early in this century, this system processes hundreds of thousands of claims from injured workers every year and pays out billions of dollars in benefits.

Workers in California experiencing injuries at work that result in permanent partial disabilities (PPD) are eligible to receive compensation. The workers' benefits, doctors' and attorneys' fees, and the system that processes the hundreds of thousands of annual claims cost employers billions of dollars each year. This report evaluates the workers' compensation system by examining its efficiency and the adequacy and equity of its benefits, and suggests system reforms. The authors conducted interviews with system participants and found that the system is still troubled by many of the same problems that plagued it before the 1989 and 1993 reforms. It remains overly costly, complex, and litigious while delivering modest benefits. The authors estimated the wage losses of PPD claimants in 1991-93, and found that even after five years, the injured workers earned considerably less than controls. In addition, injured workers experience considerable time out of work, not just immediately after the injury, but also after the initial return to work. The authors identified particular problems among claims categorized by the workers' compensation system as "minor," the vast majority of claims. For this group, wage replacement rates were lowest. Reform proposals include an elective fast track to streamline claims processing, and a revision to the disability rating schedule to improve the relationship between wage loss and benefits paid.