Making Economic Social Decisions for Improving Occupational Health A Predictive Cost-Benefit Analysis

Abstract

The few studies attempting to estimate costs of work-related disorders suffer from poor applied methodologies. Further, as the costs are often limited to the company, decisions about investment in improving the work environment are made at the company level. However, economic decisions on changing work environments and improving occupational health need to be made at the societal level. In an economic social decision, all direct and indirect costs imposed on society by work-related disorders are considered, regardless of who pays which cost. This study introduces and demonstrates a methodology appropriate for economic decisions at the societal level for preventing work-related disorders and promoting occupational health in the workplace. The methodology uses the concept of human capital in assessing productivity loss associated with the disorders. The empirical results show that Swedish society could have gained up to 442 855 537 SEK by preventing work-related disorders at the Swedish company Sandvik Materials Technology during 2014, 87% of which would have been captured by the company.