The Wages of Irregular Tasks: Workers’ Compensation Benefits and Occupational Misclassification

Abstract

Occupational titles may purposely misdirect observers from actual job tasks to reduce costs from mandatory benefits. Using the universe of OSHA accident audits, 1990-2009, we estimate the wage differentials paid for incurred performing tasks outside of occupation-associated duties. We decompose employer insurance premiums, calculating the costs attributable to legislative changes in state-mandated benefits. Wage differentials paid for irregular task risk monotonically increase with benefit costs, growing to exceed wages for regular in the upper benefit quartile for workers without postsecondary education. Our results imply that occupational classification, and how it corresponds to work tasks and risk, is endogenous to the costs of mandated benefits.