Indirect costs of disease often constitute a substantial part of estim
ated costs or savings in economic evaluations of healthcare programmes
. The human capital approach is almost unanimously used for estimating
indirect costs, defined as production loss due to disease, although a
growing number of authors question its validity. This article discuss
es the relevance of indirect cost estimates for health policy and revi
ews the current empirical and methodological literature on this issue.
It describes several important issues and controversies regarding ind
irect costs, such as the consequences of short term absence from work
for productivity, reduced productivity without absence from work, the
influence of unemployment on production loss, the relation between hea
lth effects and indirect costs, and the possible medium term macroecon
omic consequences of absence from work and disability. It concludes th
at indirect costs are relevant for health policy, provided that the es
timates of indirect costs reflect the real changes in production due t
o disease, including the production of unpaid labour. Future research
should focus on attaining these estimates. Indirect costs in economic
evaluations should preferably be presented separately from direct cost
s, health effects and other study outcomes.