The safety costs of contingent work: Evidence from Minnesota

We find that workers’ compensation costs for leased/staff agency workers are about three times higher than for regular full-time workers. This differential grows even wider when controlling for worker characteristics. Authors give a number of reasons for this result, including claimsreporting moral hazard on the part of contingent work-ers. We also present results on claim denials by work status, which seems to support the cost model. The authors gratefully acknowledge research support from the grants for research program of International Foundation of Employee Benefit Plans (IFEBP). Comments from Rich Derrig, Larry Aarhus, members of the Industrial Relations Center workshop, and an anonymous referee are greatly appreciated. The authors also appreciate Brian Zaidman for his helpful comments and assistance with the data for this study.