Investments in health protection including paid sick leave pay off

The availability of affordable health services when needed coupled with paid sick leave offers ample returns in the form of gains in health and economic productivity for employers, workers and the economy at large as healthy workers are more productive mostly due to reduced absenteeism. At the same time health related poverty will be reduced and releases public funds. In contrast, the lower productivity of sick workers has been found to slow down growth and development.

Well-designed policies focused on increasing access to health care can create a multiplier effect on productivity and thus economic growth and human development. In developing countries, the economic returns on investing in health are estimated at 24 per cent of economic growth between 2000 and 2011, taking into account increases in both national income and life years gained.

In the long term, growing tax bases arising from the indirect economic effects of investments in health will generate more public funds at national level, particularly in low- and middle-income countries.

The economic costs of working while sick exceed the costs of paid sick leave. Paid sick leave allows workers to recuperate rapidly, prevents more serious illness and disability developing, and reduces the spreading of diseases to co-workers and beyond. Working while sick, on the other hand, incurs high economic costs due to higher number of people to be treated for more severe signs of ill-health and reduced productivity from working while sick.

Presenteeism, i.e. attending work while sick, can result in productivity losses three times as great as an actual absence from work. When people are forced to attend work when ill, for fear of otherwise losing their job or income, productivity suffers, injuries increase, and disease is spread to co-workers.

Despite its important impact, the cost of paid sick leave is low: The average share of GDP spent on paid sick leave expenditure is lowest of all social protection benefits. Most recent data available indicate that it varies in European countries between 1.7 percent of social protection expenditure in Portugal and 9.8 percent in Norway.