Workers Compensation and the Aging Workforce: Is 35 the New "Older" Worker?

Posted Date: October 29, 2012

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In 2011, NCCI published a study on the aging workforce, which concluded that, on average, costs for workers aged 35 and older tend to be quite similar; in contrast, they are higher than the average costs for workers aged 16 to 34. In addition, from a workers compensation perspective, the higher costs are largely offset by the higher premium due to higher wages of older workers. Overall, the findings can be viewed as reassuring, in that an aging workforce appears to have a far less negative impact on workers compensation claim costs than might have been thought.

This study extends the 2011 NCCI analysis and finds additional similarities between the 35-and-older-age cohorts. The paper starts by comparing the share of claims by diagnosis and age cohort resulting from permanent partial, temporary total, and medical-only injuries. It goes on to identify the factors that account for the observed increases in severities over time for various age cohorts. The analysis concludes by examining safety and loss control programs related to the aging workforce.

Some Key Observations

  • For a range of specific diagnoses, the shares by type of workplace injury (i.e., temporary total, permanent partial, and medical only) are remarkably comparable across age cohorts. For example, the shares of claims due to "sprain of neck" that were temporary total injuries are virtually identical for both younger and older workers.
  • The factors accounting for increases in severity (referred to as mix, quantity, and price) over two time periods (1996/97 to 2000/01 and 2001/02 to 2007/08) are relatively similar across age cohorts.
  • For all age cohorts, changes in the mix of leading diagnoses account for a marginal share of the increase in severity for both periods, but the impact is slightly larger in the late 1990s than in the 2000s.
  • Injuries due to high severity diagnoses have historically been more common for older workers, but those high severity diagnoses are now becoming common in younger-age cohorts as well.