IDEAS home Printed from https://ideas.repec.org/a/wly/hlthec/v11y2002i3p221-231.html
   My bibliography  Save this article

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

Author

Listed:
  • 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.

Suggested Citation

  • 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.
  • Handle: RePEc:wly:hlthec:v:11:y:2002:i:3:p:221-231
    DOI: 10.1002/hec.648
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/hec.648
    File Function: Link to full text; subscription required
    Download Restriction: no

    References listed on IDEAS

    as
    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, vol. 14(2), pages 171-189, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. William White, 2006. "Consumers, information, and the evolving healthcare market place: introduction to the special section," Journal of Consumer Policy, Springer, vol. 29(3), pages 237-246, September.
    2. Andersen, Signe Hald, 2010. "The cost of sickness: On the effect of the duration of sick leave on post-sick leave earnings," Social Science & Medicine, Elsevier, vol. 70(10), pages 1581-1589, May.
    3. Thomas DeLeire & Willard Manning, 2004. "Labor market costs of illness: prevalence matters," Health Economics, John Wiley & Sons, Ltd., vol. 13(3), pages 239-250.
    4. 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;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 7(2), pages 55-64, July.
    5. Zhang, Wei & Bansback, Nick & Anis, Aslam H., 2011. "Measuring and valuing productivity loss due to poor health: A critical review," Social Science & Medicine, Elsevier, vol. 72(2), pages 185-192, January.
    6. Wei Zhang & Huiying Sun & Simon Woodcock & Aslam H. Anis, 2017. "Valuing productivity loss due to absenteeism: firm-level evidence from a Canadian linked employer-employee survey," Health Economics Review, Springer, vol. 7(1), pages 1-14, December.
    7. 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;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 7(02), pages 55-64, July.
    8. Michal Jakubczyk & Beata Kon, 2016. "The impact of firms' expectations & adjustments on the productivity cost of illness," Working Papers 2016-008, Warsaw School of Economics, Collegium of Economic Analysis.
    9. 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, vol. 5(3), pages 185-206, September.
    10. Ebere Akobundu & Jing Ju & Lisa Blatt & C. Mullins, 2006. "Cost-of-Illness Studies," PharmacoEconomics, Springer, vol. 24(9), pages 869-890, September.
    11. Daniel Arnold & Marco de Pinto, 2015. "How are Work-related Characteristics Linked to Sickness Absence and Presenteeism? - Theory and Data -," IAAEU Discussion Papers 201511, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    12. Godøy, Anna, 2016. "Profiting from presenteeism? Effects of an enforced activation policy on firm profits," Labour Economics, Elsevier, vol. 43(C), pages 122-128.
    13. Kenneth Tang, 2015. "Estimating Productivity Costs in Health Economic Evaluations: A Review of Instruments and Psychometric Evidence," PharmacoEconomics, Springer, vol. 33(1), pages 31-48, January.
    14. Zhang, Wei & Sun, Huiying & Woodcock, Simon & Anis, Aslam, 2015. "Illness related wage and productivity losses: Valuing ‘presenteeism’," Social Science & Medicine, Elsevier, vol. 147(C), pages 62-71.
    15. 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.
    16. Arnold, Daniel Timo & de Pinto, Marco, 2015. "Sickness absence, presenteeism and work-related characteristics," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113118, Verein für Socialpolitik / German Economic Association.
    17. 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.
    18. Konstantinos, Pouliakas & Ioannis, Theodossiou, 2010. "An Inquiry Into the Theory, Causes and Consequences of Monitoring Indicators of Health and Safety At Work," MPRA Paper 20336, University Library of Munich, Germany.
    19. René Böheim & Thomas Leoni, 2014. "Firms' Sickness Costs and Workers' Sickness Absences," NBER Working Papers 20305, National Bureau of Economic Research, Inc.
    20. Andrew Sharpe & Alexander Murray, 2011. "State of the Evidence on Health as a Determinant of Productivity," CSLS Research Reports 2011-04, Centre for the Study of Living Standards.
    21. Wei Zhang & Aslam Anis, 2014. "Health-Related Productivity Loss: NICE to Recognize Soon, Good to Discuss Now," PharmacoEconomics, Springer, vol. 32(5), pages 425-427, May.
    22. Krol, Marieke & Brouwer, Werner B.F. & Severens, Johan L. & Kaper, Janneke & Evers, Silvia M.A.A., 2012. "Productivity cost calculations in health economic evaluations: Correcting for compensation mechanisms and multiplier effects," Social Science & Medicine, Elsevier, vol. 75(11), pages 1981-1988.
    23. repec:kap:ijhcfe:v:17:y:2017:i:3:d:10.1007_s10754-017-9212-1 is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:11:y:2002:i:3:p:221-231. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/5749 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.