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Measuring and valuing productivity loss due to poor health: A critical review

  • Zhang, Wei
  • Bansback, Nick
  • Anis, Aslam H.
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    The objective of this study is to review current measurement issues and valuation methods such as "human capital" and "friction cost" for estimating productivity loss due to illness. Since observed wages diverge from marginal productivity when allowances are made for sick days and workers are risk averse, or when a job type involves team production, unavailability of perfect substitutes, and/or time-sensitivity of output, productivity loss is likely to be underestimated. A multiplier adjusting wage to marginal productivity needs to be developed for practical use. We further consider the ramifications of measuring labour input loss due to illness in both paid and unpaid work as well as the inclusion of presenteeism to the more traditional approach of measuring only absenteeism. Although a number of instruments have been developed to measure presenteeism, they generate widely varying estimates of productivity loss. Further investigation is required to identify which instrument provides a better estimate. Finally, we provide recommendations on measurement methods such as using subjective measures due to the unavailability of objective measures and the appropriate recall periods. We conclude by proposing a generic measure instead of a disease-specific measure and discuss important perspective related issues.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0277-9536(10)00775-6
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    Article provided by Elsevier in its journal Social Science & Medicine.

    Volume (Year): 72 (2011)
    Issue (Month): 2 (January)
    Pages: 185-192

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    Handle: RePEc:eee:socmed:v:72:y:2011:i:2:p:185-192
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    1. 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., vol. 17(4), pages 469-485.
    2. 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., vol. 15(2), pages 111-123.
    3. Drummond, Michael F. & Sculpher, Mark J. & Torrance, George W. & O'Brien, Bernie J. & Stoddart, Greg L., 2005. "Methods for the Economic Evaluation of Health Care Programmes," OUP Catalogue, Oxford University Press, edition 3, number 9780198529453, December.
    4. Karin H. M. Jacob-Tacken & Marc A. Koopmanschap & Willem Jan Meerding & Johan L. Severens, 2005. "Correcting for compensating mechanisms related to productivity costs in economic evaluations of health care programmes," Health Economics, John Wiley & Sons, Ltd., vol. 14(5), pages 435-443.
    5. Severens, Johan L. & Mulder, Jan & Laheij, Robert J. F. & Verbeek, André L. M., 2000. "Precision and accuracy in measuring absence from work as a basis for calculating productivity costs in The Netherlands," Social Science & Medicine, Elsevier, vol. 51(2), pages 243-249, July.
    6. 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, vol. 14(2), pages 171-189, June.
    7. Brouwer, W. B. F. & Koopmanschap, M. A. & Rutten, F. F. H., 1999. "Productivity losses without absence: measurement validation and empirical evidence," Health Policy, Elsevier, vol. 48(1), pages 13-27, July.
    8. Johannesson, Magnus, 1996. "The willingness to pay for health changes, the human-capital approach and the external costs," Health Policy, Elsevier, vol. 36(3), pages 231-244, June.
    9. Bengt Jönsson, 2009. "Ten arguments for a societal perspective in the economic evaluation of medical innovations," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 10(4), pages 357-359, October.
    10. Mark V. Pauly & Sean Nicholson & Judy Xu & Dan Polsky & Patricia M. Danzon & James F. Murray & Marc L. Berger, 2002. "A general model of the impact of absenteeism on employers and employees," Health Economics, John Wiley & Sons, Ltd., vol. 11(3), pages 221-231.
    11. Brouwer, W. B. F. & van Exel, N. J. A. & Koopmanschap, M. A. & Rutten, F. F. H., 2002. "Productivity costs before and after absence from work: as important as common?," Health Policy, Elsevier, vol. 61(2), pages 173-187, August.
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