Substitution between unemployment insurance and workers' compensation: an analysis applied to the risk of workplace accidents

A model which integrates substitution between unemployment insurance benefits and workers' compensation is presented. The model focuses on an extension of earlier studies involving post-injury duration of absence from work and develops a situation wherein a worker can optimize expected utility under four conditions. Results show that increased workers' compensation benefits generate related increases on the average duration of accidents given elasticity conditions from 0.9 to 1.4.