Three Systems of Workers’ Compensation
Only three countries in the world maintain sub-national workers’ compensation systems: Australia, Canada, and the United States. Three models are used to organize the insurance responsibilities for making the payments to injured or ill workers: private market, exclusive public insurer, and mixed (although the three models do not correspond exactly with the three countries).
All 10 Canadian provinces, 6 U.S. states, and 3 jurisdictions in Australia use the exclusive public insurer approach; the remaining 44 U.S. states and 4 jurisdictions in Australia use a predominately private market approach; and 3 Australian states use a mixed approach, in which the public fund bears the underwriting risk, but private firms collect and disburse the money.
We will look at each of the three models, one from each country.1 Studying different jurisdictions, even though from different nations, follows the tradition of using the "laboratory of the states" to inform policy decisions. We will describe the essential features of each system and then review system performance.