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A general model of the impact of absenteeism on employers and employees

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  • Mark V. Pauly

    (Health Care Systems Department, The Wharton School, 3641 Locust Walk, Philadelphia, PA 19104-6218, USA)

  • Sean Nicholson

    (Health Care Systems Department, The Wharton School, 3641 Locust Walk, Philadelphia, PA 19104-6218, USA)

  • Judy Xu

    (Health Care Systems Department, The Wharton School, 3641 Locust Walk, Philadelphia, PA 19104-6218, USA)

  • Dan Polsky

    (Division of General Internal Medicine, University of Pennsylvania, PA, USA)

  • Patricia M. Danzon

    (Health Care Systems Department, The Wharton School, 3641 Locust Walk, Philadelphia, PA 19104-6218, USA)

  • James F. Murray

    (Outcomes Research & Management, Merck & Co., Inc., USA)

  • Marc L. Berger

    (Outcomes Research & Management, Merck & Co., Inc., USA)

Abstract

Most studies on the indirect costs of an illness and the cost effectiveness of a medical intervention or employer-sponsored wellness program assume that the value of reducing the number of days employees miss from work due to illness is the wage rate. This paper presents a general model to examine the magnitude and incidence of costs associated with absenteeism under alternative assumptions regarding the size of the firm, the production function, the nature of the firm's product, and the competitiveness of the labor market. We conclude that the cost of lost work time can be substantially higher than the wage when perfect substitutes are not available to replace absent workers and there is team production or a penalty associated with not meeting an output target. In the long run, workers are likely to bear much of the incidence of the costs associated with absenteeism, and therefore be the likely beneficiaries of any reduction in absenteeism. Copyright © 2001 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 11 (2002)
Issue (Month): 3 ()
Pages: 221-231

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Handle: RePEc:wly:hlthec:v:11:y:2002:i:3:p:221-231

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. Koopmanschap, Marc A. & Rutten, Frans F. H. & van Ineveld, B. Martin & van Roijen, Leona, 1995. "The friction cost method for measuring indirect costs of disease," Journal of Health Economics, Elsevier, Elsevier, vol. 14(2), pages 171-189, June.
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Cited by:
  1. Gisela Kobelt & J. Berg & P. Lindgren, 2006. "Costs and quality of life in multiple sclerosis in The Netherlands," The European Journal of Health Economics, Springer, Springer, vol. 7(2), pages 55-64, July.
  2. Andrzej Torój, 2013. "Why Don’t Blanchard-Kahn ever "Catch" Flu? And How it Matters for Measuring Indirect Cost of Epidemics in DSGE Framework," Central European Journal of Economic Modelling and Econometrics, CEJEME, CEJEME, vol. 5(3), pages 185-206, September.
  3. Gisela Kobelt & J. Berg & P. Lindgren, 2006. "Costs and quality of life in multiple sclerosis in The Netherlands," The European Journal of Health Economics, Springer, Springer, vol. 7(02), pages 55-64, July.
  4. Thomas DeLeire & Willard Manning, 2003. "Labor Market Costs of Illness: Prevalence Matters," Working Papers, Harris School of Public Policy Studies, University of Chicago 0314, Harris School of Public Policy Studies, University of Chicago.
  5. Wei Zhang & Aslam Anis, 2014. "Health-Related Productivity Loss: NICE to Recognize Soon, Good to Discuss Now," PharmacoEconomics, Springer, Springer, vol. 32(5), pages 425-427, May.
  6. René Böheim & Thomas Leoni, 2014. "Firms' Sickness Costs and Workers' Sickness Absences," NBER Working Papers 20305, National Bureau of Economic Research, Inc.
  7. William White, 2006. "Consumers, information, and the evolving healthcare market place: introduction to the special section," Journal of Consumer Policy, Springer, Springer, vol. 29(3), pages 237-246, September.
  8. Ebere Akobundu & Jing Ju & Lisa Blatt & C. Mullins, 2006. "Cost-of-Illness Studies," PharmacoEconomics, Springer, Springer, vol. 24(9), pages 869-890, September.
  9. Sean Nicholson & Mark V. Pauly & Daniel Polsky & Claire Sharda & Helena Szrek & Marc L. Berger, 2006. "Measuring the effects of work loss on productivity with team production," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 15(2), pages 111-123.
  10. Andrew Sharpe & Alexander Murray, 2011. "State of the Evidence on Health as a Determinant of Productivity," CSLS Research Reports, Centre for the Study of Living Standards 2011-04, Centre for the Study of Living Standards.
  11. Pouliakas, Konstantinos & Theodossiou, Ioannis, 2010. "An Inquiry into the Theory, Causes and Consequences of Monitoring Indicators of Health and Safety at Work," IZA Discussion Papers 4734, Institute for the Study of Labor (IZA).
  12. Pouliakas, Konstantinos & Theodossiou, Ioannis, 2010. "An Inquiry Into The Theory, Causes And Consequences Of Monitoring Indicators Of Health And Safety At Work," SIRE Discussion Papers, Scottish Institute for Research in Economics (SIRE) 2010-120, Scottish Institute for Research in Economics (SIRE).
  13. Mark V. Pauly & Sean Nicholson & Daniel Polsky & Marc L. Berger & Claire Sharda, 2008. "Valuing reductions in on-the-job illness: 'presenteeism' from managerial and economic perspectives," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 17(4), pages 469-485.

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