Workers' comp and recession: Expect a decline in rate of claims

Gabrielle Lis

Unless plant closures and mass lay-offs are planned, workers' comp claim rates decline during recessions, but claim duration increases.

During times of economic slow-down, businesses may contemplate firing workers in an attempt to protect profits by cutting costs. Companies that close entire plants or engage in mass lay-offs can expect a spike in the number of workers’ compensation claims following their down-size. In an extreme example of this trend, during the recession of the early 90s an American jeans manufacturer (Big Yank) shut an Oklahoma factory employing 22...

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