Indeed, they may understate these non-legal forces. Some also paid wages to those temporarily disabled which they did not treat as compensation. In chapter three the authors discuss the economic impact of the switch to workers' compensation. The shift really did raise accident compensation and it changed other aspects of the labor market as well. They argue that workers had responded to the old liability system by buying insurance and increasing precautionary saving.
Econometric analysis suggests that under compensation they reduced saving.
Similarly, their statistics show that compensation reduced the wages of non-union workers in coal and lumber. Relying on their own earlier statistical research and that of others as well, the authors argue that compensation increased fatal accident rates in soft coal mining, for it induced miners to take long chances, while the Federal Employers' Liability Law reduced railroad fatalities. The difference, we are told, was that compensation in coal yielded moral hazard problems that the companies ignored due to high monitoring costs while supervision on railroads was cheaper. I am not entirely convinced. Unlike other aspects of their work, here neither the authors nor their sources buttress econometric findings with robust non-quantitative support.