Leslie Hakala authored the study. She began the project as an NCEO research intern and completed it for a thesis requirement at Harvard University. The study was unable to ascribe a specific causal relationship between employee ownership and lower workers' compensation costs, but it did find that these costs declined as employee ownership plans matured. Cost increases were partly attributable to increased benefits mandated by state workers' compensation insurance reforms. At the same time, as employer provided health care coverage has declined, more employees sought to cover health problems under workers' compensation.
Many people believe there has been increased fraud as well.
Workers' compensation programs vary from state to state, but in most programs, insurers attempt to provide employers with an incentive to limit safety problems by developing an experience rating. The ratings compare an individual firm's experience with other firms of its type. In this study, we looked only at California firms. Rates are assigned to all companies based on their industry classification. These rates are then adjusted for companies with a premium above a certain level according to their actual experience.