Table 2.

Human capital method and friction cost approach

	Human capital method	Friction cost approach
Valuation	Measure of potential value of production loss due to illness	Measure of actual value of production loss due to illness
Reflection of reality	Fails to account for the possibility that absent workers may be replaced	Assumption that absent employee may be replaced is only conditionally valid
Scope	Broad scope: includes cost of lost productivity due to sickness, disability, early retirement and presenteeism, as well as lost non-work time and informal carers’ time	Narrow scope: includes only productivity loss as measured by an employee replacement cost
Feasibility of assessment	Simple calculation using wages as a proxy measure of employee output	More data-demanding, requiring data on disease-specific employment rates and job vacancy duration