Prevalence and Economic Costs of Absenteeism in an Aging Population—A Quasi-Stochastic Projection for Germany

Patrizio Vanella,Doris Söhnlein,Christina Benita Wilke

doi:10.3390/forecast4010021

Abstract

Demographic change is leading to the aging of German society. As long as the baby boom cohorts are still of working age, the working population will also age—and decline as soon as this baby boom generation gradually reaches retirement age. At the same time, there has been a trend toward increasing absenteeism (times of inability to work) in companies since the zero years, with the number of days of absence increasing with age. We present a novel stochastic forecast approach that combines population forecasting with forecasts of labor force participation trends, considering epidemiological aspects. For this, we combine a stochastic Monte Carlo-based cohort-component forecast of the population with projections of labor force participation rates and morbidity rates. This article examines the purely demographic effect on the economic costs associated with such absenteeism due to the inability to work. Under expected future employment patterns and constant morbidity patterns, absenteeism is expected to be close to 5 percent by 2050 relative to 2020, associated with increasing economic costs of almost 3 percent. Our results illustrate how strongly the pronounced baby boom/baby bust phenomenon determines demographic development in Germany in the midterm.

Highlights

Since the mid-2000s, a trend toward increasing absenteeism can be observed, as the average number of days of absenteeism per case increases with age [18]. Is this trend likely to continue in the future? What economic costs are already incurred by companies because of absenteeism, and what costs can ceteris paribus be expected in the future as a result of the German demographic development? These are the questions we address in this paper
We have suggested a forecast model of absenteeism, using Germany as a case study and projecting relative change in absenteeism both in days and costs until 2050
We showed that absenteeism is a complex and, for aging economies, severe topic

Summary

Introduction

The median age in the European Union (EU), for instance, has increased from about 34 to 43 years between 1985 and 2019 [1] Those trends hold for other economically developed regions of the world. Japan, which serves as a good case study, has seen a steady increase in the share of its population aged 65 and above after World War II, starting at a value below 5% in the 1940s and reaching a value of 29% in 2020 [2]. This has strong implications for the labor market, as this trend is associated with an aging workforce [3]. Those born during that phase are often labeled the baby boomers [4]

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