Languages:
Context - Lifestyle risk factors such as obesity, tobacco use, alcohol abuse and chronic diseases can have an impact on the labour practices and productivity.
What is their economic impact on labour market?
Preliminary note:
Working Papers describe preliminary results or research in progress by the author(s) and are published to stimulate discussion on a broad range of issues on which the OECD works.
This is a faithful summary of the leading report produced in 2015 by the Organization for Economic Co-operation and Development (OECD): "The labour market impacts of obesity, smoking, alcohol use and related chronic diseases
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.
Adverse labour market outcomes, and the production losses that may be associated with them, represent a cost for society. 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 available European studies shows that various dimensions of work (e.g. employment status, working hours, job demand, job strains) have an impact on physical and mental health, but that in turn, poor health and health-related behaviours that increase people’s risk of developing chronic diseases may cause adverse labour market outcomes.
This reciprocal interrelation has the potential to lead to misinterpretations of the analyses of the labour market impacts of these health related behaviours. Appropriate statistical approaches are thus required to disentangle the causal effects of health conditions on labour outcomes, independently from any reverse causal effects.
Evidence in the available literature supports that obesity has clear negative impacts by reducing employment prospects, wages and labour productivity, especially but not exclusively in women:
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.
Long-term light drinkers have better employment opportunities than any other group, including former drinkers, former abstainers, long-term heavy drinkers and abstainers.
Light and moderate drinking is linked to social networks and spending time with colleagues outside of work, which leads to higher life satisfaction.
In Scotland, France, Ireland and in the Unites States, potential production losses were found to be an important part of alcohol-related costs and in 2003 in the European Union, alcohol abuse accounted for an estimated €59 billion worth of potential lost production.
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. Smoking cessation can improve labour market outcomes.
Most studies found in the literature show evidence of significant associations between chronic diseases (and associated risk factors) and negative labour market outcomes. Chronic diseases reduce worked hours and wages and were risks factors for transition from employment into disability pension.
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.
Negative labour market outcomes of chronic diseases also exaggerate social inequalities. 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.
Most studies found in the literature show evidence of significant associations between chronic diseases (and associated risk factors) and negative labour market outcomes. Chronic diseases reduce worked hours and wages and were risks factors for transition from employment into disability pension.
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.
Negative labour market outcomes of chronic diseases also exaggerate social inequalities. 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.
Policies can even go beyond the health sector, including labour and social policies such as the 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 programme is associated in some studies with better outcomes.
OECD governments should design health 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 then have to bear increased staff turnover and temporary replacement costs, which may make them less competitive in the marketplace.
This summary is free and ad-free, as is all of our content. You can help us remain free and independant as well as to develop new ways to communicate science by becoming a Patron!
BECOME A PATRON!