Return to Work issues in the wake of Covid-19
Back in 2010, the WCRI published a study (Recession, Fear of Job Loss, and Return to Work) which posed the question as to what the impact
of a doubling of the unemployment rate would have on longer term unemployment. For the purposes of the study, longer-term was defined as
a duration of 2.5 years after an injury. When the study was originally published, most of us could not have foreseen the Covid-19 pandemic,
or the shuddering effects of an economy that ground to a halt at breakneck speed.
The on-going impact of the pandemic has resulted in millions of vulnerable jobs and countless shuttered businesses, some of which may never
reopen. With an eye to the inevitable and immediate trickle down impact on workers’ compensation, a recent WCRI blog piece returned
to the 2010 study as a reference point to explore how recession from the economic fallout of COVID-19 can potentially affect return-to-work
programs. The study explored the effect of a doubling of the unemployment rate during a recession and its findings
indicate the following:
Long-term unemployment rate increases from 14.7 to 18.7% when the unemployment rate is doubled. Unsurprisingly, the scarcity of
work opportunities in a recession increases the likelihood of long term unemployment.
The rate of fear of job loss in injured workers increases from 35.5 to 51.3% when the unemployment rate is doubled. If an injured worker
fears the loss of employment there is a greater chance of premature return to work which in turn increases the potential for re-injury.
The WCIRB blog piece cites the biggest difference between this potential recession and prior recessions: COVID-19 resulted in a rapid
stalling of the economy following closures of bars, restaurants, concerts, sports events etc. The economy fell off a proverbial cliff causing a more
profound effect as employment possibilities become very scarce, very quickly. If the economy reboots quickly there will be a lessening effect on
long-term unemployment. The huge numbers of vulnerable jobs, the shuttering of business that may never reopen, and the uncertainty of the
timeline for a re-boot makes for challenging times ahead for workers’ compensation programs.
Ref Sources: WCRI Workers Compensation Research Institute