Struggle for Regulatory Power between States and the US Federal Government: The Case of Workers’ Compensation Insurance 1930-2000

Abstract

Abstract. This paper contributes to our understanding of the power struggle for regulatory control between the states and the US federal government, especially during the Progressive and Great Society eras. By focusing on one substantial social insurance program – workers’ compensation insurance – the effects of competition between the federal government and the states over regulatory control are demonstrated. Calls for greater generosity in the early 1970s, and the threat of a federal takeover of workers’ compensation insurance induced dramatic and lasting changes. States reacted to the federal government’s recommendations and neighboring states’ actions by raising benefit levels. A comprehensive index of expected monetary wage-replacement benefits across the US between 1930 and 2000 is constructed to demonstrate the variation over time and across states. Keywords. Political Economy, Workers Compensation. JEL. N32, N42.