Is Workers' Compensation Covering Uninsured Medical Costs? : Evidence from the 'Monday Effect'

Steady increases in the cost of medical care, coupled with a rise in the fraction of workers who lack medical insurance, have led to a growing concern that the Workers' Compensation system is paying for off-the-job injuries. Many analysts have interpreted the high rate of Monday injuries--especially hard-to-monitor injuries like back strains--as evidence of this phenomenon. The analysis in this paper, however, which uses data on "first reports" of injury filed with the Minnesota Department of Labor and Industry between 1985 and 1989, indicates that workers with low probabilities of medical coverage were no more likely to report a Monday injury than were other workers. Furthermore, employers were no more likely to challenge Monday injury claims made by workers with low medical coverage rates than claims made by workers with high medical coverage rates