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Measuring the effects of work loss on productivity with team production

Author

Listed:
  • Sean Nicholson
  • Mark V. Pauly
  • Daniel Polsky
  • Claire Sharda
  • Helena Szrek
  • Marc L. Berger

Abstract

Using data from a survey of 800 managers in 12 industries, we find empirical support for the hypothesis that the cost associated with missed work varies across jobs according to the ease with which a manager can find a perfect replacement for the absent worker, the extent to which the worker functions as part of a team, and the time sensitivity of the worker's output. We then estimate wage ‘multipliers’ for 35 different jobs, where the multiplier is defined as the cost to the firm of an absence as a proportion (often greater than one) of the absent worker's daily wage. The median multiplier is 1.28, which supports the view that the cost to the firm of missed work is often greater than the wage. Copyright © 2005 John Wiley & Sons, Ltd.

Suggested Citation

  • 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, February.
  • Handle: RePEc:wly:hlthec:v:15:y:2006:i:2:p:111-123
    DOI: 10.1002/hec.1052
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    File URL: https://doi.org/10.1002/hec.1052
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    References listed on IDEAS

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    1. 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, April.
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    Cited by:

    1. 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.
    2. Simon Wieser & Bruno Horisberger & Sara Schmidhauser & Claudia Eisenring & Urs Brügger & Andreas Ruckstuhl & Jürg Dietrich & Anne Mannion & Achim Elfering & Özgür Tamcan & Urs Müller, 2011. "Cost of low back pain in Switzerland in 2005," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(5), pages 455-467, October.
    3. Oliver Fritz & Peter Mayerhofer & Reinhard Haller & Gerhard Streicher & Florian Bachner & Herwig Ostermann, 2013. "Die regionalwirtschaftlichen Effekte der österreichischen Krankenanstalten," WIFO Studies, WIFO, number 46672, September.
    4. Raegen T. MILLER & Richard J. MURNANE & John B. WILLETT, 2008. "Do worker absences affect productivity? The case of teachers," International Labour Review, International Labour Organization, vol. 147(1), pages 71-89, March.
    5. Jesse Kigozi & Sue Jowett & Martyn Lewis & Pelham Barton & Joanna Coast, 2016. "Estimating productivity costs using the friction cost approach in practice: a systematic review," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(1), pages 31-44, January.
    6. Uschi Backes-Gellner & Stephan Veen, 2008. "The Impact of Workforce Age Heterogeneity on Company Productivity," Working Papers 0078, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Sep 2009.
    7. Dur, Robert & Glazer, Amihai, 2008. "The desire for impact," Journal of Economic Psychology, Elsevier, vol. 29(3), pages 285-300, June.
    8. Aidan R. Vining & David L. Weimer, 2013. "An assessment of important issues concerning the application of benefit–cost analysis to social policy," Chapters, in: Scott O. Farrow & Richard Zerbe, Jr. (ed.),Principles and Standards for Benefit–Cost Analysis, chapter 1, pages 25-62, Edward Elgar Publishing.
    9. Grinza, Elena & Rycx, Francois, 2018. "The Impact of Sickness Absenteeism on Productivity: New Evidence from Belgian Matched Panel Data," IZA Discussion Papers 11543, Institute of Labor Economics (IZA).
    10. Juan Oliva-Moreno & Marta Trapero-Bertran & Luz Maria Peña-Longobardo & Raúl del Pozo-Rubio, 2017. "The Valuation of Informal Care in Cost-of-Illness Studies: A Systematic Review," PharmacoEconomics, Springer, vol. 35(3), pages 331-345, March.
    11. Godøy, Anna, 2016. "Profiting from presenteeism? Effects of an enforced activation policy on firm profits," Labour Economics, Elsevier, vol. 43(C), pages 122-128.
    12. 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.
    13. McLaren, Christopher F. & Reville, Robert T. & Seabury, Seth A., 2017. "How effective are employer return to work programs?," International Review of Law and Economics, Elsevier, vol. 52(C), pages 58-73.
    14. Jesse Kigozi & Sue Jowett & Martyn Lewis & Pelham Barton & Joanna Coast, 2016. "Estimating productivity costs using the friction cost approach in practice: a systematic review," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(1), pages 31-44, January.
    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. Marieke Krol & Werner Brouwer, 2014. "How to Estimate Productivity Costs in Economic Evaluations," PharmacoEconomics, Springer, vol. 32(4), pages 335-344, April.
    17. Markussen, Simen, 2009. "The Effects of Sick-Leaves on Earnings," Memorandum 20/2009, Oslo University, Department of Economics.
    18. 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.
    19. 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.
    20. Piotr Bialowolski & Eileen McNeely & Tyler J VanderWeele & Dorota Weziak-Bialowolska, 2020. "Ill health and distraction at work: Costs and drivers for productivity loss," PLOS ONE, Public Library of Science, vol. 15(3), pages 1-15, March.
    21. Raegen T. Miller & Richard J. Murnane & John B. Willett, 2007. "Do Teacher Absences Impact Student Achievement? Longitudinal Evidence from One Urban School District," NBER Working Papers 13356, National Bureau of Economic Research, Inc.
    22. Arndt R. Reichert & Boris Augurzky & Harald Tauchmann, 2015. "Self‐Perceived Job Insecurity And The Demand For Medical Rehabilitation: Does Fear Of Unemployment Reduce Health Care Utilization?," Health Economics, John Wiley & Sons, Ltd., vol. 24(1), pages 8-25, January.

    More about this item

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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