The Great Reshuffle and Workers' Compensation Frequency

MEDIA ADVISORY

WHAT: The Great Reshuffle is reshaping the US labor market. Unemployment is historically low, but labor force participation is still lower than the pre-pandemic rate. Labor shortages have led to wage growth, especially strong among low-wage workers and in sectors like Leisure and Hospitality.

Quit rates jumped in the middle of 2021 and remain high at the time of this writing—about 50 million quits a year, almost 10 million more than pre-pandemic averages.

How do such large changes in the labor market impact workers compensation injury frequency? The magnitude of these impacts relies on the interaction of three factors:

• How much more or less likely are short-tenured or remote workers to be injured than other workers?
• How much has the share of such workers changed?
• How has the sector mix of the workforce changed during the pandemic?

KEY FINDINGS:

• The Great Reshuffle led to a modest increase in the share of short-tenured workers, a few percentage points in most sectors.
• Short-tenured workers in most sectors are close to twice as likely to suffer work injuries than full-tenured workers, but their relative risk is lower in in-person service sectors.
• The explosion of remote work during the pandemic put downward pressure on injury frequency, especially in office-based sectors.
• The net impact on frequency across multiple sectors, like a state or book of business, will vary based on the changes in industry mix and the frequency metric.
• The Great Reshuffle may have contributed to frequency anomalies in 2020 and 2021, but it is likely to cause only small deviations from frequency trends in the coming years.

Read the full report here.

WHO: Patrick Coate, PhD, Economist