Abstract
We propose to use the theoretical Mincer-Ofek (1982) model of career interruptions for the evaluation of a health producing treatment that improves residual functional capacity of workers with peripheral nerve injuries who developed chronic pain (Reflex Sympathetic Dystrophy). The revalued potential to – partially – continue to accumulate productive human capital is linked to increased lifetime earnings capacity restoring – missed out – accumulated productivity. We assume that a worker's psychological well-being directly influences earnings, but also affects the cognitive mechanism to experience pain. Randomized clinical trial data and individual medical records from impaired workers are compared with a control group of randomly selected healthy workers. The estimate of the treatment's average net present value is 49.500 euros per person (in 1995 Dutch guilders constant terms).
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Furnée, C.A., Pfann, G.A. & Kemler, M.A. Treatment Value of Residual Functional Capacity Improvement among Disabled Workers: Accounting for Hedonic Psychological Biases. De Economist 151, 171–192 (2003). https://doi.org/10.1023/A:1023964102139
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DOI: https://doi.org/10.1023/A:1023964102139