1. Information Costs and Incentives to Shirk: Disability Compensation of Air Traffic Controllers Michael E. Staten and John Umbeck

2. Air traffic controller (ATC) Job responsibility: to maintain the separation between aircraft in his assigned airspace Standard separation requirements vary according to the type of facility and altitude of aircraft, ex. at Air Route Traffic Control Centers, 5 miles horizontally or 2,000 feet vertically for aircraft above 29,000 ft.

3. Errors System Error: any violation of such standard minimums. – Anyone involved, including pilots, controlelrs, or facility supervisors, can report. Near Mid-Air Collision (NMAC): aircraft involved are less than 500 ft apart or evasive action was required by pilots to avoid a collision. – Anyone may report; nearly all NMAC reports are filed by pilots.

4. Mask Federation Aviation Administration (FAA) regulations mandate that every controller must submit to an annual physical examination. If symptoms were found of a potentially work- impairing disorder, the controller could be disqualified from his job. A controller has an incentive to mask his disability; especially emotional and psychological problems that are the most difficult to measure.

5. New Policies Amendments of Federal Employees’ Compensation Act (FECA) which was administered by Office of Workers’ Compensation Programs (OWCP) provide income insurance to government employees injured or disabled on the job since 1974. – Either a fixed award or a percentage of salary paid for the duration of the injury – Employees w/o dependents who qualify for salary percentages receive 66.666%, tax free – W. dependents, 75%, tax free

6. Increased monitoring costs Controllers have been considered particularly susceptible to emotional and nervous disorders resulting from the demands of their occupation. Prior to 1974, verification of a controller’s disability was usually made by an FAA flight surgeon. From 1974 onwards, employees were allowed to select the private physician to supply the medical testimony for their claim.

7. ATC 2 nd Career Training Program in 1972 To provide training for pursuit of a 2 nd career to controllers removed from active duty because 1) the employee was medically disqualified as a controller, or 2) such removal was necessary for the preservation of the physical or mental health of the employee. If such a controller had been employed at least 5 years, FAA pays for an approved training of the controller’s choice and maintain him at his base rate pay for up to 2 years. This program lowered the cost of unmasking a disorder.

8. ATC disease incidence changes (5 year average) Pre-2 nd career Post-2 nd career % change Neuropsychiatric 10.9 27.2 +150 Cardiovascular 22.1 32.5 +47 Respiratory 1.9 1.5 -21

9. System errors regression β Traffic 0.0121(**) D1974_4 3.12 (**) … ** means significant at the 0.05 level, one-tail test.

10. NMAC regression β Traffic.866 (**) D1974_4 -.761 … Controllers place some value on human lives.

11. 5 years service Controllers can move from about $15,000 to over $45,000 in 5 years. Subsequently their incomes rise relatively slowly. 5-years service is required for eligibility in the 2 nd Career Program.

12. Length of service S<5 5<S<10 10<S 1974 personnel w. errors 38.5% 20.6% 40.8% total 19.5 27.1 53.4 1975 personnel w. errors 32.5 29.1 38.3 total 20.0 26.7 53.3 1976 personnel w. errors 21.5 53.6 24.9 total 17.2 29.5 53.2

13. conclusion OWCP created an incentive for controllers to demonstrate deteriorating performance.