Disability Risk in Alternative Work Arrangements

Alternative work arrangements, such as independent contracting and employment through temporary help agencies, have become increasingly common in recent years. Although temporary agency workers have been shown to have higher injury rates than direct-hires in the same industries, the employment impacts of workplace injuries among temporary workers or those in other alternative work arrangements have not been studied. We use rich administrative claims data to compare employment among temporary and contract workers after suffering a workplace injury to employment for comparable direct-hire workers, examining the possibility that temporary workers may face additional employment and disability risk after injury in addition to facing higher probabilities of injury. We find that temporary workers experience greater reductions in employment after a workplace injury in comparison to observably similar direct hire employees. We observe a relative employment reduction over 7.5 percentage points immediately after injury followed by some convergence. However, employment remains 2.9 percentage points lower than would be expected for direct-hires two years after injury. This reduction cannot be attributed to differences in employment trajectories across the different categories of work arrangements. The loss of employment resulting from workplace injury is about 26 percent greater for temporary workers than for direct-hire workers. Workplace injury risk may thus place temporary and contract workers at elevated risk for transitioning to SSDI through two channels: higher injury rates, and larger reductions in employment conditional on injury.