Adverse Selection in Disability Payments

The Great Silence by Juliet Nicolson presents information on disability payments to injured World War I veterans:? 16 shillings per week (80 pence to those unfamiliar with older British money) for the loss of a right arm, 15 shillings for the loss of a left arm. Since about 90 percent of people are right-handed, this is more?equitable than the reverse.? But why not equality?? I assume the argument was that for most people (right-handers), the loss of a left arm was less serious, so it should be compensated less.

Why not pay the same, higher rate for a right-arm loss by right-handers, left-arm loss by left-handers? Were the authorities worried that people would claim that, whichever arm was lost, it was the one they used most-essentially?adverse selection? Were the administrative costs of determining handed-ness in offering compensation too high to overcome this selection problem?

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COMMENTS: 16

  1. Dave says:

    According to my grand father (who grew up in britain around this time), you were NOT allowed to be left handed. He was forced to use his right hand for writing, eating, etc. If he used his left hand he was caned. From his stories it sounded like the schools were very intolerant to students not doing things exactly as they “aught” to be done.

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  2. Ian Kemmish says:

    As two commenters have already mentioned, this happened at a time when left-handed school children were taught to use their right hands – I believe that in the late Victorian and Edwardian era his may even have included tying the left hand behind the body.

    The disparity in payment may have more to do with the belief that the left arm was naturally the weaker limb. I don’t know whether that belief was still current after WWI, but then again, given the way Whitehall works, the relative rates may even have been set even earlier and never revised.

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  3. Eric M. Jones says:

    Why not something similar for war-profiteering? More than any other war, WWI was just a means to kill people for money and the Queen.

    The French troops were the only ones who saw this and didn’t buy into the flesh-grinding nightmare. Not ONE person in 10,000 can give you coherent reasons for the war.

    And the reason for WW2?….WW1

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  4. HW says:

    People interested in what 16 shillings in, say, 1920, would be worth today (well, actually 2008) taking into account retail price inflation or changes in average earnings may consult http://www.measuringworth.com/calculators/ppoweruk/ . There is a similar calculator for US$ and some other currencies.

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  5. Alejandro says:

    Should be easy to récord the mandatory arm before they went to the war, with the ID or Army ID Number?

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  6. e e cummings says:

    @ Eric M. Jones. Ummm, no queens ruling any of the Central Powers during this war…..

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  7. e e cummings says:

    @ Eric M. Jones. Update – typo – I meant BELLIGERENT Powers, not Central Powers in my earlier comment.

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  8. Clancy says:

    Veteran: Sir, I lost my right arm in battle, but I’ve only recieved 15 shillings.
    Claims Adjuster: Well, you’re left handed. We pay 15 shillings for loss of non-dominant limbs.
    Veteran: But, sir, I’m right handed!
    (Claims Adjuster tosses a ball, the Veteran catches it)
    Claims Adjuster: There! A right handed person would have caught that in his right hand.
    Veteran: But…
    Claims Adjuster: On you way Lefty!

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