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Aging Workforce Will Not Generate Higher Comp Costs

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

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