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Input: Economic Factors

This page contains information on economic factors that affect worker injury and illness worldwide, the global economic burden of worker injury and illness, and the cost-effectiveness of workplace interventions.

For more information on economics, visit the NIOSH Economics Program website. More information on the more commonly used epidemiological burden of worker injury and illness worldwide, see the following section of this website on Occupational Risks.

Economic Factors

Economic factors affect workplace and work characteristics as well as employer and worker behaviors, which in turn affect the risk of worker injury and illness. While the specific economic factors that affect worker safety and health in each country may vary, there are several overarching factors that affect most workers worldwide. For example, WHO™ Global Plan of Action on Workers™ Health identified several main objectives to pursue during 2008-2017 that include, among others, the need to ensure worker access to preventive health services, to link occupational health to primary health care, to decrease inequalities in worker health between and within countries, to establish linkages between health and work, and to strengthen the promotion of health at work.

Healthcare costs

Rising healthcare costs affect the behavior of some employers. For example, employers may reduce the health insurance benefits they offer to their workers. However, healthcare costs also contribute to national budget deficits and, as a result, there is increased recognition by governments and employers of the need to improve worker health (for U.S. examples of such efforts see www.acoem.org/HealthyWorkforce_HealthyEconomy.aspx; CDC, Workplace health promotion web page).

Work organization and stress

Increased world trade, changes in production, the nature of employment contracts, and other human resources policies such as fringe benefits, have resulted in dramatic changes in management strategies and in the ways work is organized. These changes in organizational practices are believed to influence the risks of work-related stress and illness. For example, stress at work has been associated with a 50% excess risk of coronary heart disease [www.searo.who.int/LinkFiles/SDH_SDH_FinalReport.pdf [PDF - 7.2 MB]. In addition, changes in work organization manifested as changes in workers’ shifts and relationship to cancer is an area of active research. An IARC working group1 concluded that shiftwork involving circadian disruption is probably carcinogenic (Group 2A) (see also http://monographs.iarc.fr/ENG/Classification/).

Demographics

The changing demographics of the working population worldwide affect the potential for work-related health problems.

For example, there are many immigrant and minority workers whose primary language is different from the language spoken at their workplace and who, therefore, may be less effectively trained and less aware of hazards and work practices intended to minimize hazards.

More workers worldwide continue to work past “normal” retirement age by choice or necessity. The overall aging of the working population may result in higher risks of worker illness. For example, there is evidence of increased prevalence of chronic health conditions occurring in the middle of the usual working life. This also points to the importance of the workplace as an opportunity to affect the chronic health of workers regardless of the origin of the health condition (occupational versus non-occupational).

Health promotion opportunities at the workplace

The workplace is increasingly recognized as a setting with unique advantages for promoting healthier behaviors. Employers have the attention of their employees and the capacity to create incentives, provide facilities, and shape workplace culture to support health. 2

Emerging issues

More research is needed into the potential for adverse chronic health effects from new chemicals and technologies. For example, in the U.S. alone, during 1979-2003, premanufacture notifications --required for all newly developed substances intended for the market-- for 36,000 new chemicals were submitted to the U.S. Environmental Protection Agency (www.epa.gov/opptintr/pubs/oppt101-032008.pdf [PDF - 150 KB]). Information on acute and chronic health effects potentially related to this large number of new chemicals routinely introduced into industry worldwide is typically incomplete. Regarding new technologies, the rapid growth of the field of nanotechnology may lead to worker exposures to engineered nanoparticles whose effect on worker health has not yet been fully understood (www.cdc.gov/niosh/topics/nanotech/).

The Economic Burden of Worker Injury and Illness

The economic burden of worker injuries and illnesses is commonly expressed in dollars. Measures of the economic burden are used along with more traditional measures of occupational risks, such as numbers and rates of worker injuries, illnesses, and fatalities, to understand and communicate the many dimensions of the burden of worker injuries and illnesses. Measures of pain and suffering, such as health-related quality of life, constitute another dimension of this burden.

Estimating the global economic burden of worker injury and illness presents many data, methodological, and outcome challenges.

The International Labor Organization (ILO) estimates that the total cost of global work-related injury and illness amount to approximately 4 percent of the world’s Gross Domestic Product. 3 Based on this, a recent study on updated estimates of the global epidemiological burden of occupational injury and illness stated that in 2003, the annual cost of work-related injuries and diseases was $1.36 trillion. 4

The Cost-Effectiveness of Workplace Interventions

Economic analyses can reduce the enormous burden of worker injury and illness worldwide by guiding the design of effective, practical safety and health interventions that provide the most benefit at the least cost both at the employer’s level, by making the “business case” for preventing worker injury and illness, and at the societal level through evaluations that consider the comprehensive costs and benefits of proposed regulations and guidance.

A systematic review by the Toronto Institute for Work and Health 5 demonstrated the lack of high quality published work on the business case for prevention. The review aimed to synthesize credible evidence that it pays to invest in worker safety and health, from the employer’s perspective; of the 12,903 studies initially identified, only 67 met the reviewers’ inclusion criteria with respect to completeness of reporting, context, subject matter, and quality. To close this gap and improve the empirical evidence for the business case for prevention, it is important for employers to gain a broad understanding of the types of costs and benefits that might be important for them to consider when evaluating prevention efforts, regardless of whether they might be hard to quantify. In addition promoting and consistently using standardized methodology, such as the framework provided in Haddix et al. (2003) 6, is expected to improve the empirical evidence for the business case for prevention. NIOSH is working on additional related guidance.

Economic models developed by WHO were used to evaluate the cost of specific interventions and the resulting gain for two health outcomes. The cost-effectiveness of interventions to reduce back pain due to occupational exposures was evaluated in WHO geographic regions that illustrate different levels of development. The analysis concluded that the most effective intervention was a comprehensive ergonomics program that included engineering controls and training. Such a program could result in a 74% reduction in back pain incidence, while engineering controls alone and training alone could result in a 56% and 20% reduction in back pain, respectively. The comprehensive ergonomics program was found to be cost-effective in the three geographical regions examined, without even considering the possible increase in productivity that could be brought about by the interventions.7

Another study evaluated the cost-effectiveness of alternative interventions to reduce silicosis in developed and developing nations. The interventions included engineering controls which protect many workers (substitution; wet method; local exhaust ventilation; total plant ventilation), and training plus personal protective equipment which protect only the individual worker. The study concluded that engineering controls in both developed and developing regions were the most cost-effective interventions.8, 9

In November 2004, a conference was sponsored by NIOSH and the WHO in Washington, D.C. Attendees of the Economic Evaluation of Occupational Health and Safety Interventions at the Company Level Conference represented government agencies, public and private research organizations, academic institutions, private industry, and worker groups from different parts of the world. Tools for conducting economic evaluations were reviewed that ranged from individualized approaches for small businesses to a computerized system used in corporate settings in the U.S. The proceedings of the conference were published by the Journal of Safety Research (Volume 36, Number 3, Pages 207-308, 2005).

Tools for Economic Evaluation of Occupational Health and Safety Interventions at Company Level

The Economic Evaluation of Occupational Health and Safety Interventions at the Company Level Conference, held in November 2004 in Washington, D.C., was sponsored by NIOSH and the WHO. Attendees from government agencies, public and private research organizations, academic institutions, private industry, and worker groups from different parts of the world reviewed existing tools for conducting economic evaluations of efforts and initiatives designed to improve working conditions in businesses of all sizes and throughout the world.

The models ranged from individualized approaches for small businesses in the Netherlands to a structured method for use at garment factories in Central America to a highly sophisticated computerized system used in corporate settings in the U.S. The proceedings of the conference were published by the Journal of Safety Research (Volume 36, Number 3, Pages 207-308, 2005).

The articles published in the Journal of Safety Research describe the following tools:

  • The Productivity Assessment Tool—developed by Dr. Maurice Oxenburgh, Australia. This tool is a computer-based cost-benefit analysis model for interpreting the financial impact of occupational safety and health initiatives.
  • The CERSSO (Centro Regional de Seguridad y Salud Ocupacional) Tool Kit—developed by Dr. Rafael Amador-Rodezno, Nicaragua. This tool kit is to be used in Central American garment factories. The model integrates risk assessments, cause-effect relationships, decision-making, direct and indirect costs and savings, and calculating cost-benefit ratios to measure the financial rewards of investing in occupational safety and health.
  • Participation for Understanding: An Interactive Method—developed by Mr. Ernst Koningsveld, The Netherlands. This method promotes a more user-friendly model for measuring safety and health effectiveness that includes engaging workers, managers, and health and safety experts in discussions about costs, efforts, benefits, and effectiveness of prevention efforts to ensure that outcomes are understood by all persons involved.
  • The Potential Method: An Economic Evaluation Tool—developed by Dr. Monica Bergstrom, Finland. This tool is to be used in Finland and Sweden. It offers a valid economic calculation for measuring the effect of safety and health on production that reflects changes in the work environment. The model allows for more than 300 variables, but requires only about 12 variables to obtain an economic analysis of a change in working conditions.
  • Net-Cost Model for Workplace Interventions—developed by Dr. Supriya Lahiri, U.S. This model was developed for WHO. It is an approach for the economic evaluation of efforts to reduce work-related low back pain. The study provides a simple framework for estimating the net economic costs of investments in ergonomic interventions at the company level.
  • Return on Health, Safety and Environmental Assessments (ROHSEI)—developed by Organization Resources Councelors, Inc. (ORC) and presented by Ms. Joanne B. Linhard, ORC Worldwide, Washington D.C. This is a process and supporting tool set to be used by occupational health, safety, and environmental professionals and others to provide a comprehensive look at investment decisions as well as answer such key questions as, What safety, health, and environmental investments should we make? When should we make them? Which investments create the greatest value to the organization? More than 200 companies, government agencies, and educational institutions have been trained in the ROHSEI process since the mid 1990s.

Resources

Proceedings of the Economic Evaluation of Occupational Health and Safety Interventions at the Company Level Conference
Understanding and Performing Economic Assessments at the Company Level, in Protecting Workers’ Health Series No. 2, WHO Geneva 2004.

References

  1. Straif K, Baan R, Grosse Y, Secretan B, El Ghissassi F, Bouvard V, Altieri A, Benbrahim-Tallaa L, Cogliano V.2007. Carcinogenicity of shift-work, painting, and fire-fighting. The Lancet Oncology. 8 (12):1065-1066.
  2. Hymel, PA, Loeppke, RR, Baase, CM, Burton, WN, Hartenbaum, NP, Hudson, TW, McLellan, RK, Mueller, KL, Roberts, MA, Yarborough, CM, Konicki, DL, Larson, PW. 2011. Workplace health protection and promotion: A new pathway for a healthier—and safer—workforce. J Occup Environ Med. 53 (6): 695-702.
  3. Occupational safety and health: Synergies between security and productivity. International Labor Office GB.295/ESP/3. 295th Session Governing Body Geneva, March 2006.
  4. Paivi Hamalainen, Jukka Takala, Kaija Leena Saarela. 2006. Global estimates of occupational accidents [PDF - 155 KB]. Safety Science. 44: 137–156.
  5. Tompa E, Dolinschi R, de Oliveira C, Irvin E. A Systematic Review of OHS Interventions with Economic Evaluations. Toronto: Institute for Work and Health, 2007.
  6. Haddix AC, Teutch SM, Shaffer PA, eds. Prevention Effectiveness: A Guide to Decision Analysis and Economic Evaluation. New York, NY: Oxford University Press, 2003.
  7. S Lahiri, P Markkanen, C Levenstein. 2005. The cost-effectiveness of occupational health interventions: Preventing occupational back pain, American Journal of Industrial Medicine. 48 (6): 515-529.
  8. S Lahiri, C Levenstein, D Imel Nelson, B Rosenberg. 2005. The cost-effectiveness of occupational health interventions: Prevention of silicosis, American Journal of Industrial Medicine. 48 (6): 503-514.
  9. S Lahiri, J Gold, C Levenstein. 2005. Estimation of net-costs for prevention of occupational low back pain: Three case studies from the U.S. American Journal of Industrial Medicine. 48 (6): 530-541.

 

 
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  • Page last reviewed: December 12, 2011
  • Page last updated: December 12, 2011
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