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It provides a review of the evidence of the impacts on labour of major lifestyle risk factors such as obesity, tobacco and harmful alcohol consumption, and the chronic diseases associated with them such as diabetes, cardiovascular disease, cancer, musculoskeletal diseases and mental health conditions.
Those are examined in terms of employment opportunities, wages, productivity, sick leave, early retirement and disability benefits with findings from new analyses conducted on data from a selection of OECD countries.
The ultimate goal of the analyses presented is to contribute to assessing how far these factors may cause losses in economic production.
The valuation of potential production losses due to diseases may vary across studies as it varies with data availability and quality as well with the perspective taken for the economic assessment, depending on the objectives of the decision-makers.
| Employment | Wages | Absenteeism | |
|---|---|---|---|
| Obesity | Lower probability of employment (causal) (Morris, 2007; Tunceli et al, 2006) |
Larger wage penalties (causal) (Lundborg et al. 2010) |
More sickness absences, especially for women (causal) (Finkelstein et al, 2005; Cawley et al, 2007) |
| Alcohol Use | Long - term light drinkers
have better employment opportunities (Jarl et al 2012) |
Moderate drinking positively
associated with wages (Hamilton and Hamilton 1997) |
Absences 20% higher among
abstainers, former and heavy drinkers (causal) (Vahtera et al 2002) |
| Smoking | Heavy smokers more likely to be unemployed (causal) (Jusot et al. 2008) |
Smokers earn 4 - 8% less than non-smokers (causal) (Levine et al. 1997) |
Smokers 33% more likely to be absent from work than non-smokers
(causal) (Weng et al. 2012) |
| Diabetes | Lower probability of employment (Latif, 2009, Seuring et al., 2014, Tunceli et al., 2005) |
Diabetics earn less (Minor, 2013; Ng et al, 2001) |
Diabetes causes more work -
loss days (causal) (Tunceli et al, 2005, Ng et al, 2001) |
| Cancer | Lower employment probability (Bradley et al 2007; Candom, 2014) |
No strong evidence | Increased work absence (causal) (Drolet et al., 2005; Moran et al, 2011) |
| Musculoskeletal diseases | People with arthritis more likely to exit employment (causal)
(Oxford Economics, 2010) |
No strong evidence | Lost productive times around 5 hours per week (causal) (Stewart el al., 2003 a) |
It should be underlined that controlling for the reverse causal link between labour market position and health is not possible to establish the causal nature of the effects of poor health on adverse labour impacts. This constitutes a major methodological challenge but the existing analyses have been able to address it with varying degrees of success.
Evaluation of the potential production losses due to diseases may vary across studies as it varies with data availability and quality as well with the perspective taken for the economic assessment, depending on the objectives of the decision-makers.
It is safe to say anyway that all of the main findings of the review are supported by at least one econometrically sound analysis supporting the causal nature of the links assessed, even if this study does not provide a detailed account and discussion of the methods adopted in each study.
The findings confirm important detrimental labour market impacts from chronic diseases and associated risk factors, but also mixed effects in some areas.
Caution however is required in interpreting evidence of the labour market outcomes of chronic diseases based solely on the results of published studies because studies with positive findings are often more likely to be put forward for publication and to succeed in the publication process (causing a “publication bias”).
This paper also supports the use of carefully designed chronic disease prevention strategies targeting people at higher risk of adverse labour market outcomes, which may lead to substantial gains in economic production through a healthier and more productive workforce. Policies for the prevention of chronic diseases and their risk factors have important social outcomes, in addition to health benefits, which should be accounted for in evaluations of the impacts of such policies. The prevention of chronic diseases should be viewed as a means of improving broader social welfare.
In addition to health benefits, policies for the prevention of chronic diseases and their risk factors have important social outcomes, which should be accounted for in evaluations of the impacts of such policies. The prevention of chronic diseases should be viewed as a means of improving broader social welfare. Indeed, such adverse labour market outcomes represent a cost for society.
The largest component is costs borne by people with chronic diseases and risk factors, in terms of forgone income, but further adverse labour market outcomes, such as work-related injuries also involve additional costs for employers as well as workers.
It may or may not translate into losses in economic production, depending on either the labour markets’ ability to absorb extra labour supply, or the efficiency of mechanisms in place to compensate for the effects of labour turnover, absence from work and reduced productivity at work by sick workers.
However, the evidence reviewed and the data analysed, alone, do not (and could not) provide an exhaustive assessment of lost production. Rather, they provide measures of intermediate labour market outcomes, which may be viewed as proxies for lost production.
Chronic diseases and the behavioural risk factors associated with smoking, harmful use of alcohol, unhealthy diets and physical inactivity, affect people’s employment prospects, wages, and labour productivity. They are a cause of recurrent sick leave, including long-term absence from work, and they increase the probability of an early exit from the labour force. This often results in increased welfare payments for disability, unemployment or early retirement.
Further, given the higher prevalence of chronic diseases and behavioural risk factors in people with less education and lower socioeconomic status, the labour market consequences of those diseases and behaviours are likely to exacerbate social inequalities.
The social costs associated with the labour market impacts of chronic diseases are often estimated to be larger than the health care costs incurred for the treatment of those diseases. Therefore addressing chronic diseases through prevention and appropriate health care may lead to substantial gains in economic production through a healthier and more active workforce.
A comprehensive review of European studies shows that various dimensions of work such as employment (e.g. employment status, working hours) and working conditions (e.g. job decision latitude, job demand and job strains) have an impact on physical and mental health. The relationship between health and work is thus characterized by a two-way causal link, in which effects run not only from health to work (the main focus of this paper), but also from work to health:
Evidence from several countries shows indeed that non-employment and poor working conditions have detrimental effects on health and that a lack of control over the amount of time devoted to work could also have negative health impacts. Such effects may contribute to causing health-related behaviours and these associated chronic diseases.
It should be underlined that controlling for the reverse causal link between labour market position and health is not possible to establish the causal nature of the effects of poor health on adverse labour impacts.
This has the potential to confound analyses of the labour market impacts of these health related behaviours. This constitutes a major methodological challenge but the existing analyses have been able to address it with varying degrees of success. Appropriate statistical approaches are thus required to disentangle the causal effects of health conditions on labour outcomes, independently from any reverse causal effects.
It should be underlined that controlling for the reverse causal link between labour market position and health is not possible to establish the causal nature of the effects of poor health on adverse labour impacts.
Evidence in the literature supports that obesity has clear negative impacts by reducing employment prospects, wages and labour productivity, employment and wages, especially but not exclusively, in women:
This impact varies with gender and job characteristics: private/public sector, jobs requiring social skills or contact with clients, education level and type of occupation of the individual.
OECD analyses show conflicting results that prevent any firm conclusion on the effects of high blood pressure (HBP), cancer and arthritis on employment. As shown in table 1, overweight or obesity increases the likelihood of worker absence, may reduce labour productivity because of greater difficulties with job-related physical tasks and in completing work demands on time. For employees however one study shows that presenteeism – or working while sick – for overweight compared to normal weight people, is 10% higher, and for obese employees 12% higher.
In addition, obesity has significant indirect (non-medical) costs that are associated with absenteeism, disability, premature mortality and even presenteeism by being at work while sick, resulting in reduced performance and workers’ compensations. The loss of productivity associated with presenteeism would be even larger than that associated with absenteeism, accounting for up to two thirds of the monetary value of total productivity.
A review of 22 studies from different countries observed a substantial economic burden of excessive alcohol consumption on society attributable to impaired productivity at work, premature mortality (40%) and absenteeism.
In some studies heavy drinking is found to reduce significantly the probability of being in employment for both men and women, while a number of other studies did not found such significant relationship.
By contrast, moderate drinkers tend to be in good health, which influences positively their wages as compared to heavy drinkers and abstainers, and spend more time with their colleagues out of work, giving them a higher degree of life satisfaction than abstainers and stronger social networks, which are important factors in the labour market and determine wages to a high degree.
In Scotland, France, Ireland and the Unites States, potential production losses were found to be an important part of alcohol-related costs, where lost productivity represented 72.2% of the total economic cost of excessive drinking. In the European Union, alcohol accounted for an estimated €59 billion worth of potential lost production in 2003.
Besides the quantity consumed and pattern of consumption, the effects of problem drinking on employment appear to vary over the life cycle:
Smoking imposes a significant burden on society through increased costs in the health care system, and is likely to affect employment status because of the well-known adverse health effects. However, the negative effect of smoking on the probability of employment is found to be small except for heavy smoking, and smoking cessation can improve labour market outcomes.
Smoking increases both the risk and the duration of work absenteeism, current smokers being found to be 33% more likely to be absent from work than non-smokers. Smokers need also to have breaks during office hours and they lose concentration when they cannot satisfy their need.
Overall, the effect of smoking on labour market outcomes can be summarised as:
Smoking increases both the risk and the duration of work absenteeism, current smokers being found to be 33% more likely to be absent from work than non-smokers. Smokers need also to have breaks during office hours, and they lose concentration when they cannot satisfy their need.
A comparison between current smokers and ex-smokers showed that quitting smoking would reduce the risk of work absence, found to have positive impacts on wages, increase workers’ productivity through reduced absenteeism and enhanced performance at work.
Most studies found in the literature show evidence of significant associations between chronic diseases (and associated risk factors) and negative labour market outcomes. The literature on diabetes, cancer, musculoskeletal diseases and mental ill-health being particularly is particularly rich.
This review focused on five main labour outcomes: employment, worked hours, wages, sick days, and early retirement. Negative labour market outcomes of chronic diseases exaggerate social inequalities, since women, people with a low education level and blue collar workers are more affected by the negative outcomes of chronic diseases on employment such as sickness absence due to lower autonomy, mental illness, circulatory diseases, musculoskeletal diseases and diabetes.
| Health effects on labour | Labour Market Outcomes | ||||
|---|---|---|---|---|---|
| Employment | Wages | Sick leave | Early retirement | ||
| Note: n.s. means not significant Source: OECD analyses based on national survey data; |
|||||
| Risk factors | Obesity | Negative effect, strong evidence | Negative effect, limited evidence | Positive effect, limited evidence | Mixed findings |
| Smoking | Negative effect, strong evidence | Negative effect, limited evidence | Positive effect, limited evidence | Positive effect, strong evidence | |
| Harmful alcohol use | Mixed findings | Mixed findings | Mixed findings | Mixed findings | |
| Chronic Diseases | Cardiovascular diseases | Negative effect, strong evidence | Mixed findings | Mixed findings | Mixed findings |
| Diabetes | Negative effect, limited evidence | Negative effect, strong evidence | Positive effect, limited evidence | Mixed findings | |
| Cancer | Mixed findings | n.s. | Positive effect, limited evidence | Positive effect, strong evidence | |
| High blood pressure | Mixed findings | Mixed findings | Mixed findings | n.s. | |
| Arthritis | Mixed findings | Mixed findings | Positive effect, limited evidence | n.s. | |
For diabetes , an international study shows that it is significantly associated with a 30% increase in the rate of labour-force exit, the association varying with disease gravity.
Cancer has also a negative impact on employment probability, worked hours, and work absence, and depends on individual characteristics and disease characteristics. Lower education levels and lower socio-economic status worsen the effect of cancer on employment. People with cancer who remain in the labour force work from 3 to 7 hours less per week then cancer-free people and increases work absence.
Musculoskeletal diseases (MSD) such as arthritis, back and neck pain, are the most common health problem in the EU working population, and the second most important cause of disability worldwide with about 60% of people identifying musculoskeletal problems as their most serious work-related health problem. In US studies, people with MSDs had lower employment rates, were less likely to become employed, and were more likely to leave employment, compared with people without MSDs, and workers who report arthritis or back pain have mean lost productive times of 5.2 hours per week.
Mental ill-health reduces employment prospects and labour productivity, increases sickness absence and early exit from work, and it costs around 3.5% of Gross Domestic Product. The majority of people with mild-to-moderate mental illness are employed but people with mental health problems face a considerable employment disadvantage, they are much less likely to be employed and they face much higher unemployment rates. Poor mental health affects workers’ productivity by reducing workers’ marginal productivity when they are at work (presenteeism) and increasing the rate of absence or reducing the numbers of hours worked (sickness absence). Also, depression symptoms have a significant and large effect on sick-leave duration and long-term absence acts as the main pathway into disability benefits.
Cardiovascular diseases and high blood pressure may not necessarily be related to increased sickness absence.
In the United States more particularly, it was observed that chronic diseases reduce worked hours and wages and was a risk factor for transition from employment into disability pension, and that cardiovascular diseases, hypertension musculoskeletal decreases the planned age whereas diabetes and cancer have no significant effect.
While the OECD analyses show predominantly negative labour market outcomes of chronic diseases and risk factors, a few cases reveal inconclusive results combining both positive and negative labour market outcomes (table 2). This is the case of the labour market impacts of heavy drinking and high blood pressure, which are found to be positive in some analyses, and negative in others, according to the country studied and the statistical method used.
These contrasting findings should be viewed carefully in the light of the national context and other study features such as limitations of the data and methods used as well as possible publication bias in the literature. This is important in particular to understand the mechanism in place (either at the workplace or at the national level) to help chronically ill people to cope with diseases once diagnosed, such as the social security system and other policies.
Other possible reasons for some of the positive links found may include, for instance, that people self-report their chronic diseases, which assumes that people know about their conditions. It is possible that people who had a chronic disease diagnosed take up a healthier lifestyle, have regular health check-ups, and are more committed in the management of their disease (or risk factor) and adherence to treatment. A further possible explanation is that people with chronic diseases are more likely to be union members that could prevent from involuntary labour-force exit and reduced wages.
Health policies aimed at preventing or better managing chronic diseases and risk factors can provide important benefits to the economy at large. Such policies may cover several dimensions such as the organisation and coordination of care (e.g. diseases management programmes), health care financing (e.g. bundled payments), health professionals’ education, and the role of primary care in the prevention, early detection and treatment of chronic diseases. The evidence reviewed and the data analysed in this paper, however, do not provide information on alternative health care and disease management arrangements for the diseases and risk factors examined.
OECD governments should thus consider investing further in prevention policies targeting chronic diseases and associated risk factors, in order to make the workforce healthier and more productive, which can lead to potentially substantial gains in economic production. They should implement health, labour and social policies designed to tackle these key behavioural risk factors, as well as the subsequent chronic diseases. Those would have the potential to increase employment and labour productivity, and to reduce social disparities in health. Otherwise, governments will lose fiscal revenues from reduced employment, with possible welfare costs linked with forgone public expenditures. Employers will bear staff turnover and temporary replacement costs, which may make them less competitive in the marketplace.
Policies can even go beyond the health sector, including labour and social policies (e.g. early return-to-work programmes). For instance, following an acute phase of the disease, people with chronic illnesses who have regained their ability to work at least partially can re-enter the labour force with flexibility and appropriate facilities at the workplace. Early return-to-work programmes is associated in some studies with better outcomes.
The evidence reviewed and the data analysed in this paper, however, do not provide information on alternative health care and disease management arrangements for the diseases and risk factors examined.
There are a few good examples of countries that have invested in chronic disease prevention programmes deployed at the workplace and/or targeting the working-age population.
Prevention policies will not limit or reduce the costs of health care to a major degree. It appears that prevention policies that are not cost-saving are nevertheless generally cost effective, although some may take longer to produce their full effects than others. In most cases, the value of potential production gains, in addition to the reductions in health expenditure, were estimated to be large enough to offset the costs of delivering the prevention strategies.
If patients are given the tools to better manage their chronic diseases and lifestyle risk factors, this may avoid the chronic diseases to appear or the symptoms to worsen if the disease is already existent, which may result in saving health care spending.
Prevention policies can also save money by avoiding sickness absence and reducing the payment of disability benefits in working-age population. It can reduce unemployment benefit expenses and increase revenues by maintaining people economically active, reduce health inequalities and improve social welfare.
By targeting the social vulnerable groups who concentrate both poorer health outcomes and poorer labour market outcomes, prevention policies can improve individuals’ health, prevent people from leaving prematurely the labour force and improve social inclusion.
A computer-based simulation model of the OECD shows for example that although prevention policies to tackle obesity are not always cost-saving, some of them are, such as especially fiscal measures and regulation. On the other hand, prevention policies can improve labour productivity by maintaining people at work, avoiding sickness absence, and achieving better performance at work.
For alcohol, the OECD simulation model shows here that prevention policies to tackle harmful uses can help to reduce the occurrence of alcohol-related diseases in the working-age.
Regarding obesity, a preliminary assessment of the employment and productivity consequences showed that prevention strategies produce two main effects:
In most cases, in addition to the reductions in health expenditure, the value of potential production gains were estimated to be large enough to offset the costs of delivering the prevention strategies.
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