Aging Workforce Will Not Generate Higher Comp Costs

Jan. 30, 2001
The percentage of older workers in the nation is expected to double between 1995 and 2020, but will not affect the workers' compensation system.

The percentage of the older workers in the nation''s workforce is expected to double between 1995 and 2020. How much of an impact will such a demographic shift have on the workers'' compensation system?

Hardly any, according to "Workers Compensation and the Changing Age of the Workforce," a new study released by the Workers Compensation Research Institute.

Based on claims filed in the eight states that account for 40 percent of the workers'' compensation benefits -- California, Connecticut, Florida, Georgia, Massachusetts, Minnesota, Pennsylvania, and Texas -- the study predicts that indemnity costs will raise by 0.5 percent in 2000 and by 0.2 percent in 2005.

In 2010, however, researchers predict a reduction in total indemnity costs by 0.4 percent. In 2015 and 2020, those costs are expected to fall again, this time by 0.7 percent.

Researchers said the reason costs will be largely unaffected is a combination of two factors. While older workers hurt on the job have slightly higher claim costs than middle-aged workers, those costs are offset by the fact that older workers file fewer claims.

Researchers also said the age distribution of the workforce noticeably contributed to cost increases during the 1970s, 1980s and early 1990s. During those years, millions of baby boomers were approaching middle age. To that effect, they said, a 35-year-old has a much higher average claim cost than a 20-year-old, but a 60-year-old has only a modestly higher average cost than a 35-year old.

by Melissa Martin

About the Author

EHS Today Staff

EHS Today's editorial staff includes:

Dave Blanchard, Editor-in-Chief: During his career Dave has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeekEHS Today, Material Handling & LogisticsLogistics Today, Supply Chain Technology News, and Business Finance. In addition, he serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2021), which has been translated into several languages and is currently in its third edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

Adrienne Selko, Senior Editor: In addition to her roles with EHS Today and the Safety Leadership Conference, Adrienne is also a senior editor at IndustryWeek and has written about many topics, with her current focus on workforce development strategies. She is also a senior editor at Material Handling & Logistics. Previously she was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck?, which made the Cleveland Plain Dealer's best sellers list.

Nicole Stempak, Managing Editor:  Nicole Stempak is managing editor of EHS Today and conference content manager of the Safety Leadership Conference.

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