A Prelude to the Welfare State: Compulsory State Insurance and Workers' Compensation in Minnesota, Ohio, and Washington.

NBER Historical Paper No. 64 December 1994 JEL Nos. H11, G28, N42

Dissatisfied with the high costs of compensating workers for their injuries, seven states enacted legislation in the 1910s requiring employers to insure their workers' compensation risks through exclusive state insurance funds. This paper traces the political-economic history of compulsory state insurance in three states in the 1910s: Minnesota, Ohio, and Washington. State insurance gained broad support in these states because a coalition of progressive legislators took control of their respective legislatures, bringing with them the idea that government had the unique ability to correct imperfections in the market. The political environment in which state insurance thrived in the 1910s provides...