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Key Findings

1. Permanently disabled workers have large and persistent earnings losses.
2. Earnings losses grew much faster than permanent partial disability benefits during the Great Recession, and wage replacement rates fell as a result.
3. California's Senate Bill 863 has increased statutory wage replacement rates by 21.4 percentage points, helping to restore benefit adequacy.

A California workers' compensation law intended to help permanently disabled workers replace lost earnings is likely succeeding in providing additional benefits, according to an analysis by RAND researchers. The RAND team also determined for the first time that the Great Recession had a severe impact on the earnings of permanently disabled workers, making the higher benefits provided under the recent reforms particularly important for maintaining adequate levels of wage replacement.