The valuation of productivity costs due to premature mortality: A comparison of the human-capital and friction-cost methods for schizophrenia

Objective: To compare productivity-cost estimates for schizophrenia-related premature mortality in Canada in 1996 using the human-capital (HC) approac h and friction-cost (FC) method. Methods: The number of deaths directly attributed to schizophrenia was comb ined with the estimated number of deaths attributable to schizophrenia from suicide. These premature deaths were valued using 2 methods. 1) the tradit ional HC approach, based on "potential" lost output to normal age of retire ment, and 2) the FC method based on finding a replacement worker. Results: In 1996 there were 342 male and female preretirement deaths attrib uted to schizophrenia, directly or indirectly by suicide, in Canada. Most d eaths were in males (78%) and by suicide (97%). The productivity cost of th ese deaths was estimated to be $105 million using the HC approach but only $1.53 million using the FC method. Conclusions: Productivity-cost estimates from the HC approach are substanti ally higher than those obtained from the FC method (69 times higher). In ci rcumstances of unemployment, the NC approach is an overestimate of future p roductivity losses for premature mortality.