IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

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

Listed author(s):
  • 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)

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.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: Link to full text; subscription required
Download Restriction: no

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

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

in new window

Handle: RePEc:wly:hlthec:v:11:y:2002:i:3:p:221-231
DOI: 10.1002/hec.648
Contact details of provider: Web page:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  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)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

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)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.