WP n° 69

Experience Rating, Incidence of Musculoskeletal Disorders and Related Absences
Results from a Natural Experiment

Lengagne P., Afrite A. (Irdes)
Irdes working paper n° 69. 2015/10

In many countries, the cost of workers' compensation insurance is borne by firms. The contributions paid by a given firm are linked to its past health costs of occupational injuries and illnesses. This experience rating scheme should encourage firms to invest in occupational prevention, thereby reducing the social costs of adverse occupational exposures. This paper provides results on whether firms respond to an increase in their contribution to occupational musculoskeletal disorder health costs by reducing the incidence of these diseases and related absences. Our identification strategy exploits a natural experiment in the French context in 2007. We use administrative data on establishments for the years 2004 to 2010. Estimations are based on a Difference-in-differences model. The key result is that in activity sectors with a high prevalence of occupational musculoskeletal disorders, which have experimented the highest contribution increase, this increase has induced a substantial diminution of the incidence of those diseases, related absence days and wage indemnities.