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

• Published in: Social science & medicine (1982) Vol. 72; no. 2; pp. 185 - 192
• Main Authors: Zhang, Wei, Bansback, Nick, Anis, Aslam H.
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier Ltd 2011; Elsevier; Pergamon Press Inc
• Series: Social Science & Medicine
• Subjects: Absenteeism; Biological and medical sciences; Economic evaluation; Efficiency; Friction cost; Health care; Health Care Services; Health Status; Human Capital; Humans; Illness; Illnesses; Medical sciences; Miscellaneous; Models, Econometric; Occupational medicine; Presenteeism; Productivity; Productivity Absenteeism Presenteeism Economic evaluation Human capital Friction cost Work; Public health. Hygiene; Public health. Hygiene-occupational medicine; Risk; Sick Leave - economics; Studies; Valuation; Wages; Work; Work - economics; Workers; Productivity; Human capital; Economic evaluation; Friction cost; Work; Absenteeism; Presenteeism; Human; Costs; Loss; Labour productivity; Review; Friction; Health economy; Social medicine; Economic aspect; Bibliographic review; Public health
• ISSN: 0277-9536; 1873-5347
• DOI: 10.1016/j.socscimed.2010.10.026

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. ► Lost productivity due to illness is substantial and should be appropriately measured and valued. ► Existing instruments generate widely varying estimates of productivity loss. ► We review the current methods of valuing productivity loss. ► We highlight issues and controversies related to the measurement and valuation of productivity loss. ► We suggest methodological guidelines to align economic theory with valuation approaches for productivity loss.