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An analysis of the costs of work-related accidents and illnesses in Catalonia

A methodological proposal and figures for the years 2006 and 2007

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PUBLISHED BY Government of Catalonia Ministry of Employment Labour Relations Department AUTHORS Florencia Lilián Abiuso Daniel Serra de La Figuera Department of Economics and Business Pompeu Fabra University ACKNOWLEDGEMENTS The authors wish to thank the Ministry of Employment for its help and support, and in particular, Carles Bochaca, Carme Saborit and M. Cinta Robert of the Technical Office and Julià Nájera, Emilia Molinero and Jaume de Montserrat at the Occupational Safety and Health Department, without whom this project could not have been undertaken. They would also like to acknowledge the collaboration of the UPF lecturers Manel Luque and Eva Garrido with this study. Finally, the authors would like to express their appreciation for Professor Jaume Garcia's role as the instigator of this project.

Legal Notice This work is subject to a Creative Commons Attribution Non-Commercial Share Alike 3.0 Licence. It may be reproduced, distributed and communicated publicly providing that the author is cited and no commercial use is made thereof. The creation of derivative works arising from this permission is permitted, providing that they are disseminated with the same license. The license is also available for consultation at: http://creativecommons.org/licenses/by-nc-sa/3.0/legalcode.ca

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Contents 1. Introduction 6 2. Classification and valuation methods of the costs of work-related accidents and illnesses 9 2.1. Classification of costs of work-related accidents and illnesses 9 2.2. Cost valuation methods 11 2.3. Indirect cost valuation methods 12 2.4. Intangible cost valuation methods 13 2.5. Some lines for potential improvement in cost valuation 14 3. Inventory of costs associated with work-related accidents and illnesses and the evidence available 15 3.1. Inventory of costs associated with work-related accidents and illnesses 15 3.2. Theoretical framework used in the studies of Australia and New Zealand 17 3.3. Some empirical evidence on the importance of costs of work-related accidents and illnesses 20 4. Calculation of the costs of work-related accidents and illnesses in Catalonia 24 4.1. Scope of the research. Available databases and information 24 4.2. Description of the data for the years 2006 and 2007 26 5. A methodological proposal for calculating the costs of work-related accidents and illnesses in Catalonia 32 5.1. Costs associated with maintenance of production (CMP) 32 5.2. Long-term loss of income (PILT) 35 5.3. Healthcare costs (CMR) 37 5.4. Administration costs (CADM) 38 5.5. Deadweight loss (CTRAN) 40 5.6. Other costs (CALTR) 40 5.7. Pain and suffering costs (CPAT) 41

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6. The relationship between the methodological proposal for Catalonia and the inventory of socio-economic costs 42 6.1. Costs to individuals 42 6.2. Costs to businesses 44 6.3. Costs to society 46 7. Costs of work-related accidents and illnesses in 2006 and 2007 49 7.1. Categories calculated 49 7.2. Categories not calculated 49 7.3. Results 50 7.3.1. Costs associated with maintenance of production of accident and illness victims 52 7.3.2. Long-term loss of income 54 7.3.3. Healthcare costs of accident and illness victims 55 7.3.4. Pain and suffering costs 56 7.4. Costs of work-related illnesses 57 7.4.1. Costs of work-related illnesses associated with maintenance of production 58 7.4.2. Healthcare costs of work-related illnesses 59 7.5. Comparison of the results for Catalonia with those for New Zealand 59 8. Analysis of results 62 9. Ten conclusions 73 Methodological appendix 75 10. Calculation of work-related accident and illness costs for Catalonia 75 10.1. Estimated duration of absences from work and calculation basis for workers with work-related illnesses 75 10.2. Estimated duration of absences from work by accident victims with unresolved cases 77 10.3. Calculation of costs associated with maintenance of production 78

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10.3.1. Calculation of costs associated with maintenance of production incurred by the employer. 78 10.3.1.1. Overtime payments (PH) 78 10.3.1.2. Replacement and training costs (CSF) 79 10.3.1.3. Employer excess payment (PAE) 80 10.3.1.4. Additional payments by the employer to the Social Security (SS) 81 10.3.2. Costs associated with maintenance of production incurred by society 83 10.3.3. Costs associated with maintenance of production incurred by the worker 84 10.4. Loss of long-term income 84 10.4.1. Loss of long-term income by the worker 84 10.4.2. Loss of long-term income by society 88 10.4.2.1. Permanent disability benefit 88 10.4.2.2. Taxes not collected (IMPLT) 88 10.5. Healthcare costs 89 10.5.1. Healthcare costs associated with work-related accidents 89 10.5.2. Healthcare costs associated with work-related illnesses 92 10.6. Calculation of pain and suffering costs 92

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“In any assessment of the overall burden of occupational injury and disease the main emphasis must be on the human cost—the pain and suffering, loss of function, diminished quality of life, and premature death. Nevertheless, in recent years there has been an upsurge of interest in the economic cost of poor working conditions”.

Dorman (2000)1 1. Introduction An analysis of the figures for work-related accidents and illnesses in Catalonia in recent years2 shows that between 2000 and 2006, there was a substantial reduction in the number of work-related accidents (11.13%), in a period in which employment increased, which means that the rate or incidence of accident/illness, defined as the number of accidents for every 100,000 workers registered with one of the social security systems covering work-related accidents and illnesses in Catalonia, fell from 8,141.6 to 5,949.6 in the same period. The main area contributing to this reduction was the industrial sector, where the rate fell by 22.73%, although in terms relative to the population registered with the Social Security, the work-related accident and illness rate fell more sharply in the construction and services sectors, in which the level of employment increased most significantly. Fatal accidents and illnesses fell by a lower rate than minor accidents. This positive development in the figures for work-related accidents and illnesses should not diminish the importance of the absolute figures. According to the report by the Ministry of Employment mentioned above, there were 162,979 work-related accidents in Catalonia in 2006, of which 143 were fatal. The work-related accidents and illnesses leading to an absence from work recorded in Catalonia in 2006 entailed the loss of over 3 million working days (an average of 19 calendar days’ absence from work for minor accidents and 89 for serious accidents) with a financial cost of work-related accidents and illnesses in terms of wages and social security payments that amounted to 232.6 million euros. However, this cost does not take into account fatal accidents, or other costs such as healthcare expenditure or the costs associated with replacing the workers suffering from the accident or illness, or the costs of work-related illnesses, or the loss of future income by workers affected by a temporary disability. Other studies for Spain, such as the one undertaken by CC.OO (2005)3, estimate that the costs of work-related accidents and illnesses amount to 1.76% of GDP. At a European level, an analysis of the socio-economic costs of work-related accidents and illnesses was carried out for the 15 European Union member states in 2000, the

1 1 Dorman, P. (2000), “The Cost of Accidents and Diseases”, in P. Dorman, Three Preliminary Papers on the Economics of Occupational Safety and Health, International Labor Organization, Programme on Safety and Health at Work and the Environment (SafeWork) 2 Information obtained from the document Report on work-related accidents. 2006, produced by the Technical Office of the General Labour Relations Office and Workplace Health and Safety Department of the Ministry of Employment of the Government of Catalonia. 3 CC.OO. (2005), A consideration of the costs of work-related accidents in Spain, Federal Secretariat for the Environment and Workplace Health, CC.OO.

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point in time covered by the study (Eurostat, 2002)4. In Spain, the estimated total cost of work-related accidents and illnesses was 5,645 million euros, of which 88% were labor costs (working days lost) and the remainder was other costs. Other English-speaking countries - in particular Australia5 and New Zealand6 - have produced studies to quantify the economic cost of work-related accidents and illnesses. The two studies use very similar methodologies to quantify the costs of work-related accidents and illnesses, and the details therein include the type of cost, and how the various costs are distributed according to the agent that assumes them (the employer, worker, or society), among other aspects. It is clear that the figures for affected workers, and the size of the estimated costs to date, in both absolute terms and in relative terms as a percentage of GDP, mean that a more detailed analysis of the costs of work-related accidents and illnesses is necessary, with these costs distributed according to the agents that bear them. Using the studies of Australia and New Zealand as a benchmark, this study aims to produce a methodology for valuing the costs of work-related accidents and illnesses in Catalonia, based as far as possible on the type of costs in the studies mentioned above and the distribution of those costs according to the agent bearing them. This methodology must make clear which items are included (and which ones are not, based on the availability of information on illnesses in particular) as regards the definition of work-related accidents and illnesses as an economic cost, and must be implemented in such a way that it facilitates updating of the figures in the long term. The report begins in the second chapter with a discussion of the generic classifications of the costs associated with work-related accidents and illnesses, and the various alternative methods of quantifying (measuring) these costs. The third chapter considers the inventory of costs of work-related accidents and illnesses in detail, and distinguishes between them based on the agent bearing them. This chapter also presents the proposals made in Australia and New Zealand, with the results quantified in terms of how the total costs are divided among the agents and the type of costs. The chapter ends with the presentation of the method used by Eurostat to value the costs of work-related accidents and illnesses in the 15 European Union countries in 2000. The fourth chapter considers the availability of information for undertaking a study of this type in Catalonia. A description of the database we use is also presented. The fifth chapter presents the methodological proposal for use in estimating costs of work-related accidents and illnesses in Catalonia. The sixth chapter presents the results of calculations of work-related accidents and illnesses obtained in each of the categories defined. The seventh chapter presents a breakdown of these results by gender, age group, sector of work, occupation and other areas that we consider to be of interest. The report ends with a summary of the main aspects dealt with therein.

4 Statistical Analysis of socio-economic costs of accidents at work in the European Union, Eurostat, Working Papers and Studies, 2004. The study was produced by the Arianell Groupe Transiciel and co-ordinated by the Eurostat “Health and Food Safety” Unit D-6. 5 National Occupational Health and Safety Commission (2004), The Cost of Work-related Injury and Illness for Australian Employers, Workers and the Community, Canberra 6 Access Economics (2006), The economic and social costs of occupational disease and injury in New Zealand, NOHSAC Technical Report No. 4, Wellington

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We conclude the study with a methodological appendix containing a detailed explanation of how each calculation was performed.

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2. Classification and valuation methods of the costs of work-related accidents and illnesses It is widely accepted that the most important costs associated with work-related accidents and illnesses are human costs: pain and suffering, the potential loss of function, a poorer quality of life and a potential reduction in life expectancy. Other costs are those borne by businesses and society as a whole as a consequence of these work-related accidents or illnesses. All this has led some authors, such as Dorman (2000) to make a distinction between the economic and non-economic costs of work-related accidents and illnesses. This distinction is made according to whether these costs can be calculated as a consequence of whether the goods or services lost have a market price, or can be assigned an approximate price by a qualified observer. One consequence of this definition is that the human costs mentioned above are not considered economic costs. The economic implication of a cost is not the consequence of it being calculable, but rather the consequence of the existence of an opportunity cost (i.e. what is given up when a decision is taken or a choice made), which in this case is the loss of welfare by an individual (and society). Likewise, this distinction between economic and non-economic costs based on quantification can be based on the potential assignment made by an informed observer. As will be discussed below, the methods for translating these costs into financial terms are increasingly accurate, and are widely and increasingly accepted. We will therefore consider the quantification of the costs of work-related accidents and illnesses, rather than the economic costs of work-related accidents and illnesses, and in this context it is important to define and classify these costs and how they are valued. 2.1. Classification of costs of work-related accidents and illnesses The main reason for defining a specific classification of the costs of work-related accidents and illnesses is to assess them correctly, and to avoid the problems of double accounting that may arise depending on the classification process, and in particular, in cases where the aim is to distribute these costs between various agents (the employer, the worker and/or society). It is therefore important to make a distinction between real costs and deadweight loss. The former are related to the use of certain resources (labor or capital) or to the reduction in the economy's overall capacity to produce goods or services. However, deadweight loss does not entail the use of real resources and only involves payments from one agent to another. It is therefore a cost that does not affect the total costs associated with work-related accidents and illnesses (and therefore totals zero) but it does affect distribution costs. A typical example of deadweight loss is the payment of a fine as the consequence of a work-related accident. This involves a payment by the employer (cost) to society (an increase in resources). Of the classifications proposed in the literature to date, the one that seems to best meet these requirements of facilitating the valuation of cost and avoiding double accounting

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is the proposal by Goodchild et al (2002)7, which proposes making a distinction between direct, indirect and intangible costs. Direct costs are those related with the occurrence of a work-related accident or illness and with its prevention. This includes costs related to damage to physical items (machinery, vehicles, the environment, etc.), expenditure arising from treatment of the individuals affected and expenditure not directly related to the treatment of the individual, such as providing his/her family with help and advice. This costs category is similar to the one proposed by Dorman (2000), where direct costs to the employer are identified and attributed by the managers of the employer to the employer's health and safety budget8. Social Security contributions for work-related accidents and illnesses, payments to medical staff and the costs of legal action arising from work-related accidents and illnesses fall within these direct costs. The definition of direct costs by Leigh et al (2000)9 also complies with the headings considered by Dorman (2000). Indirect costs are losses of production as a consequence of the accident, and are mainly incurred by the person who has the accident10. These costs are basically what Leigh et al (2000) also define as indirect costs, but are not the same as what Dorman (2000) deem to be indirect costs to the employer. Among the items included in this category are replacement costs (recruitment and training of workers to replace the worker suffering from the accident or illness), the “moral” effects on the colleagues of the accident or illness victim, and the accident’s investigation costs. In fact, this is what Dorman (2000) deems to be the employer’s external costs11 (those attributed to an economic agent other than the employer where they arose), which include the indirect costs to the victim, those associated with members of his/her family and even the costs associated with the environment, which are classified as direct in the classification by Goodchild et al (2002). Finally, intangible costs are those associated with the loss of welfare by victims as a consequence of the physical, mental and behavioral problems arising from the work-related accident or illness12. These costs can be shared with other members of the family and even other members of society, according to the evidence provided by some studies in which the weight of each of these three items differs. The literature contains other classifications of work-related accident and illness costs based on other criteria. These include ex-ante costs and ex-post costs, guaranteed costs and non-guaranteed costs, fixed costs and variable costs. The latter classification makes a distinction between costs for the employer that are constant, whatever the nature of the accident or illness, and those that change depending on its nature. According to Dorman

7 Goodchild, M., Sanderson, K. and Nana, G. (2002), “Measuring the Total Cost of Injury in New Zealand: A Review of Alternative Cost Methodologies”, Business and Economic Research Limited, Report #4172 prepared for the Department of Labour, New Zealand. 8 They are those that are shown automatically in the employer's accounts. 9 Leigh, J.P., Markowitz, S., Fahs, M. and Landrigan, P. (2000), Costs of Occupational Injuries and Illnesses, The University of Michigan Press. 10 Indirect costs could also be deemed to include those incurred by the members of the accident victim's family or losses of production due to absence from work by victims of a work-related accident. 11 The importance of the external costs may differ in in each case analysed depending on various factors. Among these factors, Dorman (2000) mentions the level of competition in the market, the importance of unemployment and the level of development of public welfare programmes. 12 In the proposal by Dorman (2000), these are the non-economic costs referred to in this study.

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(2000), this classification is relevant in terms of defining economic incentives for the managers of companies, in order to reduce the prevalence and seriousness of work-related accidents and illnesses. Dorman (2000) also justifies the distinction between direct and indirect costs according to their definition, in order to assess to what extent the managers of the companies receive the economic incentives that really exist. Finally, according to Dorman (2000), the distinction between external and internal costs makes it possible to assess the difference between incentives for companies and other agents (society in general) to reduce the prevalence and seriousness of work-related accidents and illnesses. 2.2. Cost valuation methods One of the first questions to be considered when assessing the cost of work-related accidents or illnesses in a given period is the assignment of the event to a specific period of time, as there may be a disparity between the event takes place and when it is diagnosed, or between the onset of the economic consequences of the event and the diagnosis, or between when the accident takes place and when it is reported with a view to receiving the appropriate compensation. In addition, the costs can be calculated in two ways, taking into account either the costs of the accidents occurring in a specific period (year), or those that are awarded compensation in a specific year despite occurring previously or leading to payments in future periods. The first calculation is known as the incidence approach, while the second method is the prevalence approach. The incidence approach uses actuarial techniques to quantify the number of work-related accidents and illnesses diagnosed in a specific period, and to place a value on the costs for that period and the anticipated costs in future periods. This method uses a bottom-up approach: the total cost of cases dealt with in a specific year is calculated based on individual data. Meanwhile, the prevalence approach quantifies the number of people receiving compensation payments for work-related accidents and illnesses in a specific year, regardless of the date the accident occurred or the date on which the case was diagnosed, and calculates the total payments made in the period analyzed. The approach used by this method is top-down: the total payments made in a specific year are distributed in proportion to the number of accidents depending on the various categories of injuries and illnesses considered. Among other studies, the paper by Freeman et al (2001)13 compares the two methods, pointing out that the prevalence approach is less demanding in terms of gathering information, as it is initially aggregated, while in the incidence approach the basic information comes from the case histories of each work-related accident or illness that occurs in a given year. However, the incidence approach enables more exhaustive comparisons to be made between costs according to various variables, and is subject to fewer distortions created by the possible differences between average costs - which are 13 Freeman, K., LaFleur, B.J., Booth, J., Doyle, B.J. and Pugh, W.M. (2001), “An Actuarial Method for Estimating the Long-Term, Incidence-Based Costs of Navy Civilian Occupational Injuries and Illnesses”, Journal of Safety Research, 32, 289-297

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those which are covered by the prevalence approach - and marginal costs. In fact, an analysis of the various empirical contributions to the literature on the quantification of work-related accident costs shows that to the extent that information is available, the incidence approach is being used increasingly often in comparison with the prevalence approach. 2.3. Indirect cost valuation methods As mentioned above, indirect costs are equivalent to the value of the production that has taken place in the absence of the accident or illness. The methods for valuing these costs in the literature differ fundamentally in terms of how they consider the economy's operating capacity, i.e. whether the economy is considered to be functioning at full capacity (unemployment is basically frictional) or whether it is operating below this capacity, which leads to some resources - and human resources in particular - not being used, i.e. it is an economy with unemployment rates above those of frictional unemployment. In the former case, they use the so-called human capital method (HCM), while in the later they use the friction cost method (FCM). The HCM quantifies the production lost as a consequence of the accident or illness as the discounted value of the individual's future income, given that the future value is less than the present value. The underlying assumption behind this method is that wages reflect productivity, i.e. wages measure the worker’s marginal (additional) added value. Obviously, this assumption has been subject to some criticism given the variation in wages for different genders, races and age groups, meaning that in these groups, wages do not really reflect relative differences in terms of productivity. Furthermore, the choice of wage measure used is important (the average wage for the economy as a whole, the minimum wage, the wage in industrial sectors). In specific terms, the production losses measured using the HCM are potential production losses or losses arising from a reduction in the production capacity of an economy due to a given rate of unemployment. Meanwhile, the FCM tries to calculate the current (more immediate) losses of production. In the short term, the production of the absent worker is deemed to be able to be postponed or distributed among other workers, while in the long term production can be taken over by unemployed people. Obviously, this is a minimal approach in terms of production losses from the point of view of the economy, and does not give much consideration to the possible disparities between the characteristics of the individual that is replaced and his/her possible replacements, the training and preparation costs involved and the implicit loss of production during this period. The differences in quantification of indirect costs can be very substantial depending on the method used, as shown by Koopmanchap et al (1999)14 in the Netherlands. In any case, in an approach for assessing costs based on the agent that bears them, the HCM seems to be a more appropriate (and more frequently used) method, which simultaneously includes the cost to the individual potentially affected and the potential cost to society - a cost which also tends to reproduce the real cost in situations close to full employment. 14 Koopmanschap, M.A., Rutten, F.F.H., van Ineveld, B.M. and van Roijen, L. (1995), “The Friction Cost Method for Measuring Indirect Costs of Disease”, Journal of Health Economics, 14, 171-189

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2.4. Intangible cost valuation methods One of the aspects that distinguish intangible costs is that there is no market price associated with their consequences: the loss of welfare associated with physical, mental or behavioral problems as a consequence of a work-related accident or illness. The way to ascertain these costs is to quantify how much a person is willing to pay in order to reduce the probability of suffering a work-related injury or illness, which in the terminology is known as "willingness to pay". There are two methods in the literature for estimating this willingness to pay: the compensatory wage-difference method and the contingent valuation method. The basic idea behind the compensatory wage-difference method is that there is a type of trade-off between the wages an individual receives and the risk associated with his/her job. Wage differences may "compensate" for the risks assumed by the worker. Regression models are used to estimate the effect on wages of an increased level of risk in the workplace. Although the method is appealing in that it is based on "real" labor market dimensions, it has some problems such as correct perception and measurement of the risk associated with a job, the effective lack of alternative opportunities or difficulties in changing one’s job, as well as the difficulty in distinguishing between risks with and without fatal consequences, which is important in the correct measurement of differences in remuneration. This method is also an aggregated measurement of the indirect and intangible costs. Meanwhile, the contingent valuation method15 is based on a questionnaire formulating a hypothetical question: how much are we willing to pay for a specific product (less risk in this case) which has no market price? It aims to quantify the change in income, which with the change in the amount of the commodity analyzed (risk), leads to no change in the person's usefulness. The method has some limitations, which have been extensively discussed in the literature on the subject. These are mainly connected with the biases generated depending on the realism of the scenario, the way in which questions are formulated, and the way in which the quantification of willingness to pay is asked. However, unlike the compensatory wage-difference method, this method enables a questionnaire to be designed which only includes the willingness to pay linked to intangible costs. The studies by Dale-Olsen (2006)16 and d’Alberini et al (2006)17 are two good examples of how the compensatory wage-difference method and contingent valuation method are used respectively, and applied to problems similar to those that concern us here. The availability of studies in this area for the Spanish case has meant that the evidence subsequently used is based on the compensatory wage-difference method. This means that it is necessary to “clean up” this valuation of the indirect costs measured using other methods in order to obtain an estimate of the intangible costs, along the lines of 15 This method is used very often in environmental economics and health economics, in order to quantify the value of goods and services, such as the value of certain goods e.g. a forest, a beach, or receiving post-operative treatments in one's home. 16 Dale-Olsen, H. (2006), “Estimating Workers’ Marginal Willingness to Pay for Safety using Linked Employer-Employee Data”, Economica, 73, 99-127 17 Alberini, A., Hunt, A. and Markandya, A. (2006), “Willingness to Pay to Reduce Mortality Risks: Evidence from a Three Country Contingent Valuation Study”, Environmental & Resource Economics, 33, 251-264

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what Goodchild et al. (2002) call hybrid methods, which are the result of using alternative approaches. 2.5. Some lines for potential improvement in cost valuation Goodchild et al. (2002) highlight some of the areas needing most work in terms of a more accurate quantification of work-related accident costs. Among these potential lines of work are:

- Improvement of the databases of direct costs. - Consideration of the probabilities of survival and participation in the labor

market, and estimations of expected wages in the future which take into account more specific individual characteristics, such as age.

- Calculation of the indirect and inferred effects on the entire economy of work-related accidents and illnesses (depending on the type of job and sector) based on using general balance models or multipliers in a framework of partial balance.

- Improved calculation of the statistical value of a life which may be the basis for the quantification of intangible costs.

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3. Inventory of costs associated with work-related accidents and illnesses and the evidence available As soon as it occurs, a work-related accident or illness generates costs that affect three agents: the worker suffering from the injury, the employer for whom the worker works, and society, to the extent that the national Social Security system is responsible for the compensation receivable by the worker after a work-related accident or illness, among other reasons. Obviously, the type and amount of the cost differs for each of these three agents, and varies between different countries depending on the specific legislation in this area. 3.1. Inventory of costs associated with work-related accidents and illnesses The European Agency for Health and Safety at Work published a study by Mossink and de Greef in 2002, which was an inventory of the categories of costs which they believe must be taken into consideration when calculating the economic load involved in work-related accidents. As pointed out by Mossink and de Greef (2002)18, the list of variables that must be taken into account in a valuation of the costs of work-related accidents and illnesses is a long one, and it is difficult to make this list complete while avoiding double accounting. In their study, they present a list of variables which are classified according to which of the three agents (worker, employer or society) bears the cost concerned. The costs borne by the worker include the following variables:

- health: expenses (hospitalization, medicines, rehabilitation, adaptations of the home, etc.) not covered by the worker's and/or employer's insurance policy,

- quality of life, - pain and suffering, - income from current work lost, - potential income lost in the future, and - other expenses not covered by the worker's and/or employer's insurance policy

(travel costs to hospital, funeral costs, etc.) For the variables associated with costs attributable to the employer, the study makes a distinction between two groups depending on whether the effects of the accident or illness can be directly expressed in monetary terms19. For example, they can be expressed in monetary terms if it is possible to add up the invoices for the money invested by the entrepreneur to facilitate the return to work, or the costs of repairing machinery damaged as a consequence of an accident. Other categories, such as absence from work due to illness, generate an economic cost, but these calculations are not merely a matter of adding up invoices. If we assume that a person's wage is equivalent to their productivity, we can then estimate the loss of productivity arising one day's absence from work. However, this measurement is not direct.

18 Mossink, J. and de Greef, M. (2002), Inventory of Socioeconomic Costs of Work Accidents, European Agency for Safety and Health at Work, Luxembourg, Office for Official Publications of the European Communities. 19 In their inventory of variables, Mossink and de Greef (2002) also mention the costs of prevention in the field of occupational health and safety, and the potential benefits arising from these activities.

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Among the variables that can be included are:

- non-medical rehabilitation: advice, preparation and adjustments in the workplace to facilitate the return to work,

- management of issues related to absences due to illness or accident, - equipment damaged by the accident, - other non-healthcare costs: accident investigation costs, - increases in insurance premiums payable, - costs associated with legal proceedings and penalties, - extraordinary payments to cover absences, - production time lost, - opportunity costs, and - interest from expenditure arising from an accident or work-related illness if

these sums have been invested. The variables that cannot be directly expressed in monetary terms include the following:

- death, early retirement and disability: penalties, compensation to victims, - absences, and - turnover of personnel as a consequence of inadequate working conditions.

With regard to the costs attributable to society, the proposal by Mossink and de Greef (2002) has the disadvantage of its definition of society including both the worker suffering from the work-related accident or illness and his/her employer. This means that the worker’s list of variables is basically the same as those for the other two agents. To a certain extent there is double accounting, as the costs to society in this approach could be a type of total costs. They also consider that it is incorrect to account for compensation payments for work-related accidents or illness as costs to society, as they are transfers that are not linked to production and the amount is not equivalent to the production capacity lost, or the pain or suffering. However, we do consider that this compensation is a cost, as it is expenditure caused by the temporary incapacity that would not have occurred if the work-related accident or illness had not taken place. At the same time, we consider society to be all the individual or institutional agents, except for the worker who is a victim of the accident or illness and the employer affected, and as such double entries for certain costs are avoided. In fact, the approach mentioned in the previous paragraph is the one used in the studies of work-related accident costs undertaken recently for Australia (NOHSC, 2004)20 and New Zealand (Access Economics, 2006)21. The two studies use a cost classification that is practically identical to the one used for the costs inventory published by the European Agency for Health and Safety at Work. 20 National Occupational Health and Safety Commission (2004), The Cost of Work- Related Injury and Illness for Australian Employers, Workers and the Community, Canberra 21 Access Economics (2006), The Economic and Social Costs of Occupational Disease and Injury in New Zealand, NOHSAC Technical Report 4, Wellington

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As well as being more specific about the costs taken into account in the appropriate empirical studies, they are grouped in various categories which are important for presenting the distribution of the total costs of work-related accidents and illnesses to the worker, employer and society, and distributed between them. These categories (cost groups) are as follows:

- Production maintenance costs. - Human capital costs. - Healthcare costs. - Administration costs. - Deadweight loss (CTRAN) - Other costs.

The costs associated with the pain and suffering of the victims of work-related accidents and illnesses are valued separately in the two studies. Furthermore, neither includes the costs arising from damage to physical capital (machinery, tools, equipment etc) or the costs associated with damage to the employer's image, or the costs of occupational hazard prevention. In the latter case, as pointed out by Access Economics (2006), the basic reason is that expenditure on prevention must be considered as expenditure for creating a safer working environment, and not as a cost to be avoided. In this study, we will use the costs of work-related accidents and illnesses in the studies of Australia and New Zealand as the basis for classification. These studies include practically all the categories in the costs inventory of the European Agency, but are not limited to a conceptual description of them. They provide mathematical formulas for calculating each one in practice. The objective of this study is to adapt the methodology used in Australia and New Zealand, which is along the same lines as that considered by the European Agency, to the Catalan case. For this reason, we will describe the methodology used in the countries of Oceania in more detail. 3.2. Theoretical framework used in the studies of Australia and New Zealand We will begin by describing the cost categories in the study of New Zealand, which was the basis for the proposal for Catalonia. The costs associated with maintaining production are those that arise between the point at which the temporary disability occurs, and the worker affected returning to work or being declared permanently disabled, assuming that the employer wishes to maintain the same production levels. These costs therefore include the value of production (measured in terms of wages), the extra cost arising from maintaining the level of production and the partial and total costs of the permanent replacement of the individual involved. Table 1 shows the items (and their description) included in the costs associated with production, which are distributed between the worker, the employer and society.

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Table 1: Costs associated with maintenance of production

TOTAL EMPLOYER WORKER SOCIETY Value of production (VTP)

Overtime hours payments (PE) The employer must pay the wages of those covering the absence as an extraordinary cost

Loss of income until the time of return or permanent disability, net of payments received Difference between the wages that would have been received if the accident/illness had not occurred and the wages received at the time of return to work or declaration of permanent disability

Payments (compensation) for loss of wages and losses in unpaid taxes until the time of return to work or declaration of permanent disability Temporary disability benefit and volume of taxes not collected

Employer excess payment (EEP) Remunerations for the period between when the accident/illness occurs and when benefits start to be received

Replacement and training costs (CSF)

Replacement and training costs Costs associated with the premature need to recruit a new worker

Zero Zero

Human capital costs are long-term costs arising from the current value of the future income that the worker will not receive due to the work-related accident or illness from which he/she suffers, and which leads to permanent disability. They therefore cover the period between the date on which permanent disability is declared, and the time of official retirement. Table 2 shows the categories of human capital costs. Table 2: Human capital costs

TOTAL EMPLOYER WORKER SOCIETY Current value of income before the accident less subsequent income (CCH)

Zero

Current value of income before the accident less subsequent income net of compensation Calculated as residual

Current value of payments (compensation) for the loss of wages and losses in taxes after declaration of permanent disability Permanent disability allowances and taxes not collected

The healthcare costs category is where there are the most differences in the regulations between the case of Catalonia and those of Australia and New Zealand. Medical care and rehabilitation costs are fully covered by mutual insurance companies for work-related accidents and illnesses in the Spanish case. As a result, apart from occasional expenses that may be incurred by the person affected, the expenses are shown as costs to society. Table 3 shows the contents of this costs category.

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Table 3: Healthcare costs

TOTAL EMPLOYER WORKER SOCIETY Healthcare costs associated with the accident (CMR*)

Zero Zero Medical and rehabilitation expenses associated with work-related accidents and illnesses

In general, administration costs are the costs associated with the administration of compensation programs, the processing of claims and records, management of databases and costs of investigation of accidents. With some exceptions, these costs are not usually identified or valued. The studies of Australia and New Zealand make a distinction between administration costs, legal costs, investigation costs, travel costs and funeral costs. Table 4 lists the items associated with these four categories. Table 4: Administration costs (CADM)

TOTAL EMPLOYER WORKER SOCIETY Legal costs (CLEG) Procedural costs plus

fines and penalties Procedural costs Less fines and penalties

Investigation costs (CINV)

Costs associated with data collection, reports, etc.

Zero Inspection costs

Travel costs (CDES) Zero Travel costs payable by worker

Travel costs payable by health centers

Funeral costs (less current value of the future cost) (CFUN)

Zero Funeral costs (less current value of future cost)

Zero

Distortion costs are the deadweight loss generated by the introduction (or management) of a tax. These costs are attributable to the society that manages the payment and collection of taxes. Table 5 gives a basic description of the contents of this cost category. Table 5: Transfer or deadweight costs

TOTAL EMPLOYER WORKER SOCIETY Costs associated with management of payments or collection of taxes (CTRAN) The basic costs are already included in other entries

Zero Zero Costs associated with management of payments or collection of taxes

The other costs in this study include those related with the needs of some workers for caregivers for some tasks (personal care, help with mobility, help with household tasks, etc.) and these workers may even need specific equipment in some cases. These expenses are mainly borne by the worker, except in the case of serious disability, when part of the cost is included in the benefit that the worker receives. Table 6 shows the items in this category of other costs.

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Table 6: Other costs

TOTAL EMPLOYER WORKER SOCIETY Care costs (caregivers (CSPA) and equipment (CEE)) of those with permanent disability (CALTR)

Zero Payment of caregivers and equipment Current value of cost of caregivers and equipment

Payment of caregivers in the event of serious disability Current value of payment of serious disability benefit for the caregiver

This study, like those of Australia and New Zealand, also considers the costs associated with the accident or illness victim's pain and suffering. 3.3. Some empirical evidence on the importance of costs of work-related accidents and illnesses As the methodological approach we propose in chapter 4 is very similar to the one used in the studies of Australia and New Zealand, it seems wise to analyze the results of the two studies in order to see how work-related accident and illness costs are distributed between the three agents - the worker, employer and society - and to ascertain the relative importance of the various types of costs. The results of this comparative analysis are presented in Diagram 7. First, the aggregated distribution in these two studies, depending on the agents bearing the cost, is as follows:

- Australia:

employer (3%) worker (44%); society (53%) ex-post employer (28%) worker (44%); society (38%) ex-ante

- New Zealand:

employer (6%) worker (46%); society (48%) ex-post employer (16%) worker (44%); society (38%) ex-ante

The distinction between ex-ante and ex-post is a consequence of the inclusion of the contributions paid by the employer for work-related accidents and illnesses as a cost to society (ex-post) or to the employer (ex-ante). Obviously, this distinction only affects the percentages of the total costs pertaining to the employer or to society. As anticipated, the human capital costs (which are the current value of future losses of income) are those which account for the largest proportion of the total costs in both cases (79.26% in the case of Australia and 62.22% in the case of New Zealand). There is also a significant difference between the weight of healthcare in the two studies, as a consequence of two areas, public health system payments (PUB) and other costs through private insurance companies, which may be due to the different regulations on health coverage in the two countries and/or problems of availability and measurement of some variables related with these costs.

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Table 7: Percentage distribution of work-related accident costs (Australia22 and New Zealand23) TOTAL EMPLOYER WORKER SOCIETY Costs associated with production

VP 3.43 11.38 HE 0.99 3.24 BSC 0.73 0.71 EEP 0.29 1.06 TXC 0.09 2.51 PCC 1.13 2.39 CS 0.26 0.31 0.26 0.31 Total 3.70 11.69 1.69 4.83 0.06 1.24 1.95 5.61 Human capital costs

BSL 13.85 8.02 TXL 11.67 13.69 PCL 14.95 2.12 Total 79.26 62.22 38.78 38.39 40.47 23.83 Healthcare costs

GAP 0.12 0.45 MED 1.60 3.37 REH 0.26 REH 3.75 1.12 PUB 2.02 OCM 6.08 Total 5.53 14.16 0.17 0.86 0.12 0.71 5.35 12.57 Administration costs

LEG 1.28 0.67 0.17 0.44 INV 1.51 0.65 0.38 0.16 1.13 0.49 DES 1.19 0.47 1.02 0.10 0.17 0.37 FUN 0.03 0.02 0.01 Total 4.01 1.12 1.05 0.16 1.22 0.10 1.75 0.86 Management costs

CGB 0.73 CGT 3.11 Total 3.84 4.86 3.84 4.86 Other costs CUI 2.73 4.55 2.73 4.55 EQI 0.87 1.43 0.87 1.43 Total 3.60 5.98 3.60 5.98 TOTAL 100.0 100.0 2.88 5.85 43.76 46.45 53.36 47.70 Total with costs due to pain

241.1 426.0* 1.19 1.37 76.67 84.43 22.13 11.20

* percentage of the estimated total without taking the cost of pain and suffering into account These differences also become apparent after analysis of the costs associated with production, which account for a higher proportion in the case of New Zealand than in the case of Australia, which could be explained by the different prevalence and type of accidents and illnesses that occur in the two countries. In fact, the part of these costs that

22 National Occupational Health and Safety Commission (2004), The Cost of Work-related Injury and Illness for Australian Employers, Workers and the Community, Canberra 23 Access Economics (2006), The economic and social costs of occupational disease and injury in New Zealand, NOHSAC Technical Report No. 4, Wellington

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affect the worker as costs associated with production is not as important as it is in the case of human capital costs, in which the proportion is similar to those borne by society. The two studies present very significant evidence for the greater importance of the costs associated with pain and suffering caused by work-related accidents and illnesses. When these intangible costs are taken into account, the total costs are multiplied by 2.41 in the case of Australia and 4.26 in the case of New Zealand. At the same time, accounting for these costs leads to a substantial change in the distribution of costs between the three agents. Afterwards, it is the worker who bears the most important part: 76.67% of the total costs in the case of Australia and 84.43% in the case of New Zealand. Their importance in the total and the changes they cause in the distribution means that they are considered as a separate category of work-related accident costs in the methodological proposal for Catalonia. They will not be calculated separately, as they are in the studies of Oceania. In European terms, the most comprehensive study on the costs of work-related accidents and illnesses is a study produced by Arianell Groupe Transiciel and coordinated by the Unit D6 “Health and Food Safety” of the Directorate-General for Employment, Social Affairs of the European Commission (Eurostat, 2004)24. The year of reference is 2000, and the study was carried out in the 15 member states of the European Union at that time, and considers the cost of work-related accidents and illnesses leading to more than three working days lost as a consequence of the event concerned. In order to ascertain the costs associated with work-related accidents and illnesses, a series of surveys were performed on a sample of employers and workers who were victims of accidents and illnesses in three member states (Italy, Luxembourg and Portugal). There were 289 employers in the final sample (the vast majority of which were Portuguese) and there were 217 workers in the sample (who were also Portuguese in the majority of cases). The type of costs considered in the questionnaire included costs relating to material damage, damage to physical capital (machinery, vehicles, buildings, etc.), repair costs, replacement machinery rental costs, production losses, replacement of workers, losses of clients or orders, legal expenses, administrative costs, costs of damage to image and a residual figure for other costs. The labor costs of the following types of accidents are calculated:

- accidents leading to temporary disability (plus those in the first year for accidents with permanent disability) as a result of the number of accidents by the number days absent from work and the labor cost per day;

- accidents leading to permanent disability, taking into account the level of disability and the years until retirement; and

- fatal accidents. These three categories are similar to those of the costs associated with production and human capital costs25 in the classification used in our study. 24 Eurostat (2004), Statistical Analysis of Socio-Economic Costs of Accidents at Work in the European Union, Working Papers and Studies, Eurostat, Theme 3, Population and Social Conditions 25 The calculation of the costs of fatal accidents or those leading to permanent disability has been made without taking into account the current value of future income lost.

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The non-work-related costs of accidents and illnesses leading to temporary disability and for the first year of fatal accidents and those leading to permanent disability are also calculated. This information is obtained from the results of the surveys, with the problems of representation mentioned above, by calculating the proportion of accidents and illnesses with associated non-work-related costs and the ratio between the average of non-work-related costs and work-related costs. The latter two amounts are the same for all the countries, with no distinction between sectors of economic activity, and only differ in terms of the number (interval) of days absent from work. The results of this analysis for Spain place the total costs of work-related accidents and illnesses at 5,645 million euros, of which 4,960 million euros (87.87%) are labor costs26. The costs associated with temporary disability or the first year of permanent disability amount to 39.15% of the total costs and cover 1,189,049 accidents and illnesses, while the 5,194 accidents led to death or permanent disability. The study does not include a breakdown of costs according to the agent to which they are attributable. In any event, the cost structure used in this study would enable figures to be generated for Catalonia that are comparable to those used in the Eurostat study (2004).

26 This proportion is slightly higher than the figure obtained for the studies of Australia and New Zealand, of 82.96% and 73.91%, respectively.

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4. Calculation of the costs of work-related accidents and illnesses in Catalonia 4.1. Scope of the research. Available databases and information. There are various reasons why not all work-related accidents and illnesses receive compensation. These include ignorance of the entitlement to claim, accidents affecting workers in an irregular contractual situation, accidents causing non-incapacitating injuries or those which lead to short absences from work which do not create a claim record. In order to calculate the costs of work-related accidents and illnesses in Catalonia, we will use records of work-related accidents, registrations, deaths and illnesses. Using records of work-related accidents and illnesses enables us to work directly on the affected population. However, this excludes work-related accidents and illnesses that receive no compensation, which are included in the studies of Australia and New Zealand. In the case of Australia, there is a specific survey of work-related accidents and illnesses (ABS Work Related Injuries Survey) which includes both those cases that lead to compensation and those that do not, thereby enabling an estimation of cases that do not receive compensation based on the difference27. In the case of New Zealand, using the estimates in a prior study of work-related accidents, estimates are made for the intervals of work-related accidents and illnesses, regardless of whether they receive compensation. This information is used to generate three possibilities (minimum, basic and maximum) for the number of uncompensated cases. Unfortunately, this type of information is not available for Catalonia, and as such we must restrict our analysis to cases receiving compensation. We will use the incidence method, which covers the episodes in which the absence from work begins on a date in a specific calendar year - in this case 2006 and 2007. For work-related accidents, we will use a combination of two data sources: work-related accident records and records of returns to work and deaths. Work-related accident and illness records provide us with information about when the accident took place. Being able to relate this base with registrations and deaths provides us with more information on the development of accident victims. The information of work-related illnesses was taken from the official record of work-related illnesses for 2006. The information available for work-related accidents is much more comprehensive and reliable than that obtained for work-related illnesses. Information is provided on the characteristics of the worker affected, the accident and economic information on the worker in terms of the company where the accident took place.

27 A limitation of this survey is that it does not say whether a worker has suffered from one or more work-related accidents over a year - it merely shows whether the worker has suffered from any, and will therefore to some extent underestimate the total number.

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As for the characteristics of the worker, information is available on variables including age, gender, nationality, the type of occupation and sector of economic activity of the employer where the worker works, among other factors. The information on the accident shows whether it is a report of an accident/illness or relapse, the time when it took place, where the accident took place (in the workplace or traveling to or from work), the level of seriousness (minor, serious, fatal) the type of accident28, the description of the injury29, the part of the body injured30’ the cause of return to work31 and the duration of the period absent from work. With regard to the latter variable, when the database was created, 12.43% of the 2006 cases and 17.25% of the 2007 cases were reports that were unresolved for various reasons, and as such the anticipated durations have been estimated.32 A limitation of the information on the characteristics of the injury is that the result of the proposals for permanent disability are unknown, not only in terms of whether the proposal was accepted, but also in those cases where it was accepted, the level of permanent disability conferred. We will therefore make allocations based on the aggregate information on permanent disability benefits provided by the National Social Security Institute in 2006 and 2007. In order to calculate healthcare costs, we will use an estimate of the average medical and rehabilitation costs for 28 diagnostic groups listed by a mutual insurance company for work-related accidents and illnesses. Finally, with regard to the variables that give us economic information on the individual's contract, we have information on the monthly calculation basis for Social Security payments in the previous month, the days for which contributions were made and the annual contributions for overtime hours and other reasons. All this information enables calculation of the total daily social security contribution calculation basis, which shows the benefit or allowance that the accident victim will receive. Using the information on the social security contribution calculation basis as a means to ascertain the worker's wages in order to calculate the costs associated with production and the human capital costs has an advantage and disadvantage. The advantage is that it implicitly takes into account that work-related accidents and illnesses do not occur on a uniform basis in all types of occupation or sector, or in each of these two categories, and the calculation can be improved if the average wage figures for occupations and/or sectors are used. The disadvantage lies in the fact that the calculation basis has a

28 This refers to the contact caused by the accident victim's injury and describes how the victim has been injured (physical or psychological contact) in terms of the agent causing injury. The information was processed at one-digit level from the classification used in the European Statistics on Accidents at Work. 29 This describes the physical consequences of the accident victim. The information was available at three-digit level from the classification used European Statistics on Accidents at Work. 30 In cases of injuries to various parts of the body, the most serious is considered. The information was available at three-digit level from the classification used European Statistics on Accidents at Work 31 The classified causes are the following situations: exitus, treatment, medical examination, proposed disability, end of deadlines, improvement that enables normal work to be done and failure to appear. 32 The algorithm is shown in the methodological appendix.

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maximum threshold, which means that it does not show the wage for levels of payment above this maximum calculation basis33. The information for work-related illnesses is only available for 2006. It is also much less rich and comprehensive in that it only includes information on age, gender, the type of job and the sector of economic activity for the worker's description and on the seriousness of the illness and type of illness that he/she is suffering from. It will be necessary to make allocations not on an individual level, but instead based on the various combinations of attributes of individuals’ characteristics, in terms of the duration of the absence from work, the incidence of various types of permanent disability and wages (calculation basis) in order to be able to calculate the costs associated with production and human capital costs. 4.2. Description of the data for the years 2006 and 2007 As mentioned above, we have no information on work-related illnesses for 2007, and the information available for 2006 is much less exhaustive than that for work-related accidents. For this reason, the initial description of the data for work-related accidents and illnesses in this section focuses exclusively on work-related accidents.

Table 1: Number of accidents by age and gender

2006 Sex

Age Men Women Total % Age From 16 to 24 years old 23,300 7,465 30,765 16.4% From 25 to 34 years old 48,579 15,068 63,647 33.8% From 35 to 44 years old 35,758 12,067 47,825 25.4% From 45 to 54 years old 21,986 9,319 31,305 16.6% 55 years old and over 10,994 3,566 14,560 7.7% Total 140,617 47,485 188,102 100.0% % sex 74.8% 25.2% 100.0%

2007 Sex

Age Men Women Total % Age From 16 to 24 years old 21,008 7,150 28,158 15.4% From 25 to 34 years old 45,339 14,808 60,147 32.9% From 35 to 44 years old 35,563 12,516 48,079 26.3% From 45 to 54 years old 21,879 9,725 31,604 17.3% 55 years old and over 11,062 3,812 14,874 8.1% Total 134,851 48,011 182,862 100.0% % sex 73.7% 26.3% 100.0% The database we will be using for the following work includes 188,102 work-related accidents in 2006 and 182,862 in 2007. In 2006, 74.8% of the total accident victims were men, and 25.2% were women. These percentages were very similar in 2007, at 73.7% and 26.3% respectively.

33 Expected wages could be assigned in these cases using the estimate of a model in which the dependent variable was the calculation basis and using the observable factors that could affect the wage, such as the type of job, sector of economic activity and age, while taking into account the censored nature of the calculation basis as a variable approximating the wage.

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Table 2: Wage-earning population of Catalonia by gender

Wage-earning population of

Catalonia

4th quarter 2006 % 4th quarter 2007 %

Men 1,569 54.9% 1,616 54.7% Women 1,290 45.1% 1,337 45.3% Total 2,859 100.0% 2.953 100.0% Units: thousand people. Source: Idescat, based on data from the NSI active population survey. The information published by Idescat shows that men account for 55% of the wage-earning population in Catalonia, and women 45%. Despite this, men suffer from over 70% of accidents. The rate of incidence, defined as the amount of accident victims per thousand workers, is much higher for men than it is for women.

Table 3: rate of incidence by gender

2006 Men Women Total Accidents per thousand workers 90 29 66

2007 Men Women Total

Accidents per thousand workers 83 36 62 In 2007, the amount of male accident victims was 83 per thousand workers, and the amount of female accident victims was 36 per thousand workers. Table 1 shows that the population aged between 25 and 34 years old suffered the highest percentage of work-related accidents, with 33.8% in 2006 and 32.9% in 2007. They are followed by the population aged between 35 and 44 years old, with 25.4% and 26.3% respectively, and then by the population between 45 and 54 years old, with 16.6% and 17.3%. They are followed by those between 16 and 24 years old (16.4% in 2006 and 15.4% in 2007), and finally those aged over 55 years old (7.7% in 2006 and 8.1% in 2007).

Table 5: Wage-earning population of Catalonia by age

4th quarter 2006 % 4th quarter 2007 % From 16 to 24 years old 311 10.9% 310 10.5% From 25 to 34 years old 917 32.1% 929 31.5% From 35 to 44 years old 779 27.2% 823 27.9% From 45 to 54 years old 559 19.6% 582 19.7% 55 years old and over 293 10.3% 309 10.5% Total 2,859 100.0% 2,953 100.0% Units: thousand people. Source: Idescat, based on data from the NSI active population survey.

Rate of incidence by age

2006 16 to 24 25 to 34 35 to 44 45 to 54 55 and over

Accidents per thousand workers 99 69 61 56 50

2007 16 to 24 25 to 34 35 to 44 45 to 54 55 and over

Accidents per thousand workers 91 65 58 54 48

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The highest rate of incidence is among the youngest sector of the population. In 2006, 99 of every thousand workers aged between 16 and 24 years old suffered from an accident. As the age of the population increases, the rate of incidence falls.

Table 6: Number of accidents by duration and nationality

2006 Nationality

Duration Foreigners % Spanish % Total % 1 to 3 days 3,534 12.2% 17,733 11% 21.267 11.3% 4 to 13 days 12,412 42.8% 65,105 41% 77.517 41.2% 14 to 29 days 9,556 33.0% 49,101 31% 58.657 31.2% 30 to 89 days 2,741 9.5% 21,178 13% 23.919 12.7% More than 89 days

741 2.6% 6,001 4% 6.742 3.6%

Total 28,984 100.0% 159,118 100.0% 188.102 100.0% % nationality 15.4% 84.6% 100.0%

2007 Nationality

Duration Foreigners % Spanish % Total % 1 to 3 days 3,071 9.2% 16,253 11% 19,324 10.6% 4 to 13 days 10,295 31.0% 60,551 40% 70,846 38.7% 14 to 29 days 17,385 52.3% 46,283 31% 64,208 35.1% 30 to 89 days 1,958 5.9% 20,961 14% 22,919 12.5% More than 89 days

502 1.5% 5,063 3% 5,565 3.0%

Total 33,211 100.0% 149,651 100.0% 182,862 100.0% % nationality 18.2% 81.8% 100.0% The proportion of foreigners among accident victims was 15.4% in 2006 and 18.2% in 2007. This proportion was similar among both workers with Spanish nationality and foreigners. In 15.4% of the work-related accidents that took place in 2006, the person affected was not Spanish, while the percentage of the employed population in Catalonia that were foreign nationals in the second quarter of 2006 was 15.22% (García, 2007)34, almost identical amounts. The highest proportion of accident victims (41.2% in 2006 and 38.7% in 2007) were absent from work for between four and 13 days. They were followed by those absent from work for between 14 and 29 days (31.2% in 2006 and 35.1% in 2007). Those absent from work for between 30 and 89 days accounted for 12.7% in 2006 and 12.5% in 2007. 11.3% of absences in 2006 and 10.6% in 2007 were for between 1 and 3 days. Finally, 3.6% (2006) and 3% (2007) of accident victims were absent from work for more than 89 days.

34 García, J. (2007), “The labour market in Catalonia in the last 10 years (1996-2006)”, in the Catalan Economy: Future challenges, Government of Catalonia and BBVA, 129-154

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Table 7: Number of accidents according to type of accident and real seriousness

2006 Type of accident

Real seriousness Traffic accidents Other accidents Total % Minor 15,402 171,023 186,425 99.1% Serious 360 1,039 1,399 0.7% Very serious 25 53 78 0.0% Fatal 86 114 200 0.1% Total 15,873 172,229 188,102 100.0% % seriousness 8.4% 91.6% 100.0%

2007 Type of accident

Real seriousness Traffic accidents Other accidents Total % Minor 15,876 165,274 181,150 99.1% Serious 412 1,080 1,492 0.8% Very serious 16 40 56 0.0% Fatal 72 92 164 0.1% Total 16,376 166,486 182,862 100.0% % seriousness 9.0% 91.0% 100.0% In 2006, 99% of the accidents were minor and the other 1% were serious, very serious and fatal. In 2007, these percentages are practically identical. 8.4% of accidents in 2006 and 9% of those in 2007 were traffic accidents. 86 of the 200 deaths in 2006 and 72 of the 164 in 2007 occurred in traffic accidents. Approximately 43% of the deaths in work-related accidents were in traffic accidents. Of the 86 deaths in traffic accidents in 2006, 51 were in accidents during journeys to and from work (59%). In 2007, this figure was 45 out of 72, or 62.5%.

Table 8: Number of accidents by occupation

2006 CCO94 (1 digit) Frequency % Armed forces 1,780 1.0% Administration and business managers 417 0.2% Scientific technicians and professionals, intellectuals 3,744 2.0% Technicians and support professionals 6,550 3.5% Administrative employees 7,514 4.0% Restaurant and personal services and retail workers 27,509 14.6% Skilled workers, agricultural and fishing 2,054 1.1% Manufacturing, construction and mining workers 57,004 30.3% Installations and machinery operators, and fitters 29,928 15.9% Unskilled workers 51,602 27.4% Total 188,102 100.0%

2007 CCO94 (1 digit) Frequency % Armed forces 1,960 1.1% Administration and business managers 418 0.2% Scientific technicians and professionals, intellectuals 3,912 2.1% Technicians and support professionals 6,345 3.5% Administrative employees 7,681 4.2% Restaurant and personal services and retail workers 27,074 14.8% Skilled workers, agricultural and fishing 1,951 1.1% Manufacturing, construction and mining workers 54,783 30.0%

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Installations and machinery operators, and fitters 28,497 15.6% Unskilled workers 50,241 27.5% Total 182,862 100.0% Workers in manufacturing, construction and mining are those with the highest proportion of work-related accidents (30.3% in 2006 and 30% in 2007), followed by unskilled workers (27.4% and 27.5%) and installations and machinery operators (15.9% and 15.6%).

Table 9: Number of accidents by sector CCAE93 Rev. 1

2006 CCAE93 Rev. 1 Frequency % Agriculture and farming 2,538 1.4% Fishing 425 0.2% Mining industries 562 0.3% Manufacturing industries 55,212 29.4% Electricity, gas and water 589 0.3% Construction 38,685 20.6% Retail and repairs 25,059 13.3% Hostelry 9,776 5.2% Transport and communications 10,844 5.8% Financial brokerage 698 0.4% Real estate and rentals 20,791 11.1% Civil service, defense and Social Security 7,525 4.0% Education 1,319 0.7% Healthcare and social services 6,573 3.5% Other social activities 7,434 4.0% Domestic staff 67 0.0% Extra-territorial bodies 5 0.0% Total 188,102 100.0%

2007 CCAE93 Rev. 1 Frequency % Agriculture and farming 2,519 1.4% Fishing 377 0.2% Mining industries 590 0.3% Manufacturing industries 50,749 27.8% Electricity, gas and water 652 0.4% Construction 37,615 20.6% Retail and repairs 25,352 13.9% Hostelry 9,083 5.0% Transport and communications 11,612 6.4% Financial brokerage 631 0.3% Real estate and rentals 20,309 11.1% Civil service, defense and Social Security 7,399 4.0% Education 1,361 0.7% Healthcare and social services 7,385 4.0% Other social activities 7,084 3.9% Domestic staff 127 0.1% Extra-territorial bodies 17 0.0% Total 182,862 100.0% The manufacturing industries are those with the highest proportion of accidents (29.4% in 2006 and 27.8% in 2007) followed by the construction sector (20.6% in both years) and retail and repairs (13.3% in 2006 and 13.9% in 2007).

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Table 10: Number of accidents by sector of work

2006 Sectors of work Frequency % Agriculture 2,963 1.6% Industry 56,363 30.0% Construction 38,685 20.6% Services 90,091 47.9% Total 188,102 100.0%

2007 Sectors of work Frequency % Agriculture 2,896 1.6% Industry 51,991 28.4% Construction 37,615 20.6% Services 90,360 49.4% Total 182,862 100.0%

Table 11: Employed population by sector of work

By sector of work 4th quarter 2006 % 4th quarter 2007 % Agriculture 87.4 2.5% 75.1 2.1% Industry 788.4 22.8% 763.6 21.5% Construction 438.9 12.7% 448.6 12.6% Services 2,137.3 61.9% 2,260.0 63.7% Total 3,452.0 100.0% 3,547.3 100.0%

Table 12: Rate of incidence by sector of work

2006 Agriculture Industry Construction Services Accidents per thousand workers 34 71 88 42

2007 Agriculture Industry Construction Services Accidents per thousand workers 39 68 84 40 In this section, the rate of incidence is calculated according to the employed population based on the sector of work published by Idescat. The sector with the highest rate of incidence is construction. In 2006, 88 in every 1,000 workers had an accident. In 2007, the figure fell to 84 in every 1,000. Agriculture has the lowest rate of incidence, with 34 in every 1,000 in 2006 and 39 in every 1,000 in 2007.

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5. A methodological proposal for calculating the costs of work-related accidents and illnesses in Catalonia We will use the work-related accidents costs structure of Australia and New Zealand to show how the various components of this structure are calculated for Catalonia. This chapter is divided into the same sections as the cost categories for Australia and New Zealand in Tables 1 to 6 in part 3, and the final section shows the quantification of the costs associated with the pain and suffering of workers who are victims of a work-related accident. 5.1. Costs associated with maintenance of production (CMP) These are the extra costs of maintaining the same level of production while the individual is absent from work. This assumes that employers prefer to maintain production rather than lose production and have under-used equipment. These costs are calculated for each of the agents involved in the process as shown below. Employer (CMPE) In order to maintain the level of production, the employer must assume a number of extraordinary costs. We have grouped them in four categories:

• Overtime payments (PH) • Replacement and training costs (CSF) • Employer excess payment (PAE) • Extraordinary Social Security payments (SS) • Overtime payments (PH)

The employer must cover an absent individual's work, and therefore no longer pays his/her wages, but must pay the wages of the individual(s) who cover the absence as an extraordinary cost (wages plus additional compensation). We assume that all the accidents and illnesses will be covered by overtime hours worked by personnel within the employer. Payment of overtime (PH) is calculated as the daily wage (including overtime) (SMD) multiplied by the number of days absent from work due to the accident (DB) and multiplied by the additional compensation (reward) (%) per overtime hour worked (CA) in all those with a minor level of seriousness. In other words: PH = SMD * DB * (CA/100)

• Replacement and training costs (CSF) In cases in which the assumption is that the worker's return to work will not be full (staggered, partial) or he/she will not return to work, there is an additional cost of replacement of the absent worker and training of his/her replacement.

33

Estimates for this type of cost vary widely in the various studies in the literature consulted. A possible initial estimate could be made based on the fees charged by human resources consultants for their services (replacement) and the information on the time required to attain appropriate knowledge of the requirements of each job (training). While in New Zealand and Australia this cost is estimated in terms of a daily wage, in Catalonia it is calculated as a percentage of the gross annual wage that is considered as the cost of the search (PCB). However, this cost would be reduced due to the fact that because of the turnover rate in the labor market in Catalonia, at the time the accident takes place, only half the average number of years spent by the worker in a job (DLLT) would remain in terms of replacing that person. The current value of future replacement/training costs must therefore be discounted when the worker leaves the job. This involves using a discount rate (d) and using the gross annual wage (SBA). In other words, the replacement and training costs would be: CSF = (SBA*PCB)-((SBA*PCB)/(1+d)0.5 * DLLT)

• Employer excess payment (PAE) The studies of Australia and New Zealand define a category including the payments or number of days’ wages that a worker must receive from the employer before starting to receive the benefits (days between the accident and beginning of reception of benefit). These are called "employer excess payments” (PAE). In the case of Spain, the worker is covered by temporary disability benefit starting from the day after the accident. In other words, unlike in Australia and New Zealand, the employer does not have to pay any wage cost between the day of the accident and the beginning of the allowance. It can only be said that on the day the accident takes place, some hours are lost, which are a cost that the employer must bear. These are calculated using the average ordinary hourly wage (SOMH) and the time at which the accident takes place (HA) PAE=SOMH*(8-HA)

• Extraordinary Social Security payments (SS) One cost we take into account in the Catalan case which was not included in the studies of Australia and New Zealand, are extraordinary payments to the Social Security arising from having a worker absent from work. There are two possible situations, depending on whether the absent worker is replaced by overtime hours worked by other workers in the same employer, or by a new worker.

-Replacement by overtime hours When the accident victim is replaced by overtime hours worked by the other workers, the employer must make payments to the Social Security for those overtime hours and also continue to make the Social Security contributions for the absent worker. The

34

contributions paid for these overtime hours (SSHE) can therefore be considered an extraordinary cost. They are calculated by multiplying the payments for overtime hours (PH) by the contribution rate of overtime hours (TCHE)35. SSHE=PH*TCHE

- Replacement by another worker In Spain, while a worker remains employed by an employer, the latter must make contributions to the Social Security on his or her behalf. When the worker on leave is replaced by a new worker, the employer must therefore continue to pay the Social Security contributions of the employee on leave, which are slightly reduced (CSB), and those of his/her replacement. We assume that the contributions for the replacement are an extra Social Security cost that must be borne by the employer. They are calculated by multiplying the average daily wage (SMD) by the number of days absent from work (DB) and the rate of social security contributions (CSB)36. SSB=SMD*DB*CSB Extraordinary Social Security payments can be defined as the total costs arising from the recruitment of a replacement and the extra costs arising from the arrangement of overtime hours. SS=SSB+SSHE

• Voluntary aid In addition to the temporary disability benefits paid by the Social Security, many workers receive voluntary aid. These are commitments made by employers (normally in agreement with their workers) to improve temporary or permanent Social Security benefits. While we know that many workers benefit from this type of aid, unfortunately we do not have the necessary information to be able to include them in the calculations of the costs borne by the employer. The part of the production maintenance cost that falls to the employer (CMPE) would therefore finally be: CMPE = PH + CSF + PAE+ SS Society (CMPS)

35 The final calculation also takes into account the savings in sales in having paid a lower rate for work-related accidents or illnesses due to having a worker on sick leave. See the methodological appendix. 36 Despite the concept being the same, due to the particularities of the Spanish contribution system, the final calculation is more complex than the one presented in this section. The contributions for overtime hours must be calculated separately. Furthermore, the savings involved in paying a lower rate for work-related accidents or illnesses due to having a worker on sick leave is also taken into consideration. See the methodological appendix.

35

The costs of maintaining production borne by society can be grouped into two categories:

- Temporary disability benefit (SIT) - Taxes not collected (IMPP) • Temporary disability benefit (SIT)

The national Social Security Institute or mutual insurance company for work-related accidents and illnesses (depending on what the employer has chosen to cover the work-related accident or illness) will pay the worker the appropriate benefit (SIT) to compensate for wages lost due to the accident (75% of the calculation basis). SIT=SMD*0.75*DB

• Taxes not collected (IMPP) Likewise, there is an additional cost to society in terms of the taxes (income tax) not received from the worker who has suffered from the accident (IMPP)37. This can be calculated by applying the average income tax rate (TIRPF) calculated on based on income to the difference between the average daily wage and the benefit received. IMPP = (TIRPF/100) * (SMD * DB – SIT) The part of the cost of maintenance of production that is paid by society (CMPS) would therefore finally be38: CMPS = SIT + IMPP Worker (CMPT) The part of the cost of maintenance of production borne by the worker who has suffered the accident (CMPT) is calculated as residual, i.e. as the difference between what he/she would have received as a wage if the work-related accident or illness had not happened and what he/she receives until the return to work or until there is a proposal for permanent disability (benefits, employer excess payment), taking into account that he/she now pays less taxes. CMPT = (SMD * DB) – (SIT + PAE – IMPP) 5.2. Long-term loss of income (PILP) The loss of long-term income is equivalent to the human capital costs category in the studies of Australia and New Zealand. This is the total income during the working life

37 Obviously, the person who replaces the worker who has suffered from the accident or who is ill also pays their taxes, but in this case the replacement and the Government are part of the same group (society) and this effect is therefore cancelled out internally within this group. 38 In the case of the studies of Australia and New Zealand, there is a third factor in the cost of maintenance of production which is borne by society: this is the social benefits to which workers who have suffered from an accident are eligible (“sickness benefit” and “disability allowance”)

36

of a worker (until his/her retirement) that is lost when he/she cannot return to his/her job at the same level of work as beforehand after suffering from a work-related accident or illness. In other words, it is the difference between the current value of his/her income before the injury took place (VPIAI) and the current value of his/her income afterwards (VPIDI). It is obvious that this type of cost does not affect episodes that lead to full return to the workplace (only temporary disability). In other words, the total cost of the long-term loss of income would be calculated as: PILP = VPIAI – VPIDI Where

disability seriousor absolute total,permanent is thereif 0 workreturn to partial a is thereif *

*365

)1(

)1(

1

1

IAIkIDI

SMDIAI

dIDIVPIDI

dIAIVPIAI

EPIEJ

ii

EPIEJ

ii

=

=

+=

+=

∑

∑

−

=

−

=

IAI = 365 * SMD IDI = k * IAI if there is a partial return to work

0 if there is permanent total, absolute or serious disability d = Discount rate. (Calculated as the average weighted rate of 30-year securities after discounting the average annual inflation rate of the last five years) and where EJ is the average retirement age, EPI is the average age when the benefit begins and k is the proportion of income before the accident received by the accident victims after partially returning to their work. None of the costs of long term loss of income are met by the employer. Society (CCHS) The compensation received by workers in the future can be calculated based on the regulations governing amounts receivable and according to different types of disabilities (PIP)39, applying given percentages to the proposals for permanent disability that are resolved favorably. The current value of these benefits (VPPIP) would be: 39 In general, the regulations on benefits for permanent disability, in the case of partial permanent disability for the worker's normal work, provide for a single payment equivalent to 24 monthly wages; in

37

∑−

= +=

EIPEJ

ii)d(

PIPVPPIP1 1

where EIP is the individual's age when the proposed permanent disability is approved. There is also a cost associated with the taxes that are not paid collected to the lower income level of the worker who has suffered the accident (IMPLT): IMPLT = (TIRPF/100) * (CCH – VPPIP) As a result, the long-term loss of income to society would be: CCHS = VPPIP + IMPLT Worker (CCHT) The long-term loss of income to the worker can be calculated as residual, i.e., as the difference between the total cost of human capital and the cost that can be attributed to society. CCHT = CCH - CCHS 5.3. Healthcare costs (CMR) These costs must include the real expenditure on treatment and rehabilitation of workers who have suffered a work-related accident or illness in order to return to health and help them to return to work. Information on these costs (CTLES) provided by the mutual insurance company for work-related accidents and illnesses is required for each different type of work-related illness and injury (TLES) according to one of the established classifications (e.g. ICD-9), taking into account that they completely cover the medical and rehabilitation expenditure associated with the event. As a result, these costs should be assigned solely and exclusively to society (CMRS)40.

the case of permanent disability for the worker's normal work, the benefit will be 55% of the calculation basis, which is increased by 20% for those aged over 55 years old; in the case of total permanent disability for any type of work benefit will be 100% of the calculation basis; and, finally, in the case of serious disability, the benefit will be 100% of the calculation basis plus 50% of this calculation basis for the caregiver. 40 In the case of the study of New Zealand, part of the healthcare costs ("threshold payments”) are payable by the employer; another part are paid by society, which includes payments to those affected to compensate for medical and rehabilitation costs (with a correction factor that is rounded upwards to assess total expenditure) expenditure by other institutions (private insurance companies) calculated as residual and expenditure by public hospitals (which are estimated at 14.2% of the total cost, which can be estimated based on this figure); and the worker's proportion which includes expenditure on rehabilitation by workers that is not compensated and a proportion (16.1%) of the residual cost which is left over from the total cost and cannot be assigned to any of the items mentioned above. A similar procedure is followed in Australia.

38

n CMRS =Σ TLES * CTLES 1 However, the study by Castejón (2002)41 presents evidence on the proportion of cases involving temporary disability due to common illness and non-work related accidents, which could be considered as work-related according to the subsequent assessment of two experts. Finally, 33 of the 207 cases analyzed are in this situation (agreement between both experts involved, or two out of the three experts), i.e. 15.94%. This proportion rises to 30.91% (64 cases out of 207) if we include those where one of the experts finds a relationship between the temporary disability and work42. As a consequence, a proportion (k) of the expenses arising from treatment of temporary disabilities associated with non-work-related common illnesses or accidents (DITnoL) must be accounted for as a cost associated with work-related accidents or illnesses. CMR = CMRS = CMR* + k * DITnoL 5.4. Administration costs (CADM) In general, administration costs are linked to administration of payments of benefits and allowances, management of disability applications, investigation of the events, maintenance of databases and the preparation of reports and statistics. The classification adopted for the studies of Australia and New Zealand classifies these administration costs in four categories: legal costs, investigation costs, travel costs and funeral costs. Employer (CADME) This is based on the assumption that the legal cost borne by the employer and the worker is the same. This cost (CLEGE) could be calculated based on the average costs associated with each legal proceedings (CPJ) multiplied by the proportion of work-related accidents and illnesses that are legally resolved (tJ) and by the number of work-related accidents and illnesses (Nº). CLEGE = tJ * CPJ * Nº The fines, penalties and compensations arising from legal proceedings must also be taken into account. These costs (CMSIE) could be calculated by multiplying the average fine and/or penalty for each proceedings (MS) plus the compensation (I) for the proportion of events that are resolved legally. CMSIE = tJ * (MS + I)

41 Castejón, J. (2002) The role of working conditions in temporary disability doe to common illness and non-work related accidents, Doctoral Thesis, Autonomous University of Barcelona 42 This proportion is 35.75% (74 cases out of 207) if the assessment by the person with occupational disability of its relationship with work is taken into account.

39

The latter cost only affects how the costs are distributed between the three agents, but does not affect the basic cost at all: It is a transfer from the companies to society (fines and penalties) and/or to the worker(s) (compensation). The investigation costs of work-related accidents and illnesses are usually calculated for society, as in the case of the study of New Zealand, as a proportion (kI) of the total payments made as benefits and allowances43. On this basis, a proportionality factor is applied between the investigation costs to the employer (CIE) and to society (CIS). As a consequence, the employer's investigation costs would be: CINVE = (CIE/CIS) * kI * SIT The employer does not assume travel costs44 or funeral costs. The administration costs allocated to the employer would therefore be: CADME = CLEGE + CMSIE + CINVE Society (CADMS) Society receives the amounts of the fines and penalties (CMSIS) imposed on the companies in legal proceedings. It is therefore a negative cost, which as mentioned above is compensated for in overall terms by the (positive) cost to companies. CMSIS = -tJ * MS We discuss how the investigation costs of work-related accidents and illnesses borne by society (CINVS) are calculated above. CINVS = (1-(CIE/CIS)) * kI * SIT An estimation could be made of travel costs (CDESS) based on the average number of visits (journeys) that must be made by the individuals affected requiring ambulance services (NVISa), with this multiplied by the (average) cost associated with this type of journey (CmDESa). CDESS = NVISa * CmDESa Society is assumed not to meet funeral costs. The administration costs that could therefore be allocated to society are: CADME = CDESE + CMSIE + CINVE Worker (CADMT) As mentioned above, the legal costs are assumed to be the same for the employer as they are for the worker (CLEGT). 43 This proportion should be calculated based on the average cost associated with each inspection. 44 There are some travel costs that could be allocated to the employer (travel to courts), but they are not included due to their lack of importance.

40

In the event of compensation, as was the case with fines and penalties, these are included as a cost under the workers heading (CSMIT). CSMIT = -tJ * I An estimate could be made for travel costs (CDEST) similar to that proposed for society, based on ascertaining the average number of visits (journeys) that must be made by individuals with no need for ambulance services (NVISnoa), with this figure multiplied by the (average) cost associated with this type of journey (CmDESnoa). CDEST = NVISnoa * CmDESnoa As regards funeral costs (CFUNT), it is necessary to take into consideration that the amount arising from the fact that at some point in the future, the victim would have died even if an accident had not occurred, must be subtracted from the average cost of a funeral (CmFUN). It is therefore necessary to take into account a discount rate (d) when making the calculation and to allocate a number of years for the updating, i.e. the difference between the life expectancy among the group of victims (EV) and the average age of those involved in accidents that lead to the death of the person affected (EM)45. CFUNT = CmFUN – CmFUN (1 + d)EV-EM As a consequence, the administration costs that could be allocated to the worker would be: CADMT = CDEST + CMSIT + CINVT + CFUNT 5.5. Deadweight loss (CTRAN) Tax payments entail a transfer of income from individuals to society which is associated with some management costs. Alternatively, they could be considered in terms of the loss associated with the distortions involved in the introduction of a tax ("deadweight loss"). Some deadweight loss is therefore associated with the taxes arising as a consequence of the replacement of the worker (CTRAN) that are assumed solely and exclusively by society (CTRANS), which is the agent administering these taxes. This needs to be quantified in terms of the taxes involved (those paid by the word that replacing the accident victim), in terms of a proportion of them (dw)46. This deadweight loss would therefore be: CTRAN = CTRANS = dw * (TIRPF/100) * VTP 5.6. Other costs (CALTR) Workers suffering from a permanent work-related accident or illness may need the services of auxiliary care staff (CSPA) for some tasks (personal care, help with 45 In both the study of New Zealand and of Australia, the importance of funeral costs is insignificant. 46 In the case of New Zealand, this proportion is calculated at 18%, although there is a great deal of variation between the estimations available.

41

mobility, help with housework, etc). In these cases, these workers may even need special equipment (CEE). As a result, these services, whether arranged privately or through the public sector, involve additional real costs with a long-term component which must therefore be accounted for as the value of the future costs from the time of the accident until the age equivalent to the life expectancy. For the moment, they are allocated to the worker, although it remains to be seen what proportion of these costs may be covered by the public sector. EJ-ERT

CALTR = Σ (CSPA + CEE) = CALTRT i=1 (1 + d)i 5.7. Pain and suffering costs (CPAT) Obviously, all work-related accidents and illnesses have a degree of pain and suffering which may be extreme in situations that have permanent effects, or even lead to the death of the individual involved. To obtain an economic valuation associated with the level of disability for each type of situation (0% if there has been no injury and 100% in the case of death), it is necessary to have an estimate of the value of one year of human life (VVH), and a disability index (between zero and one) depending on the type of injury or illness (IDIS). As mentioned above, the estimation of the value of a human life is usually made based on the estimate of the willingness to pay in order to reduce the risks that may affect an individual's life. This estimate is usually made using a (hedonic) wage equation estimate, which measures how much a person would be willing to pay in order to compensate for the fact that the probability of dying increases by a given percentage. The international literature on this subject is extensive, and it is compiled in the study by Viscusi and Aldi (2003)47, but there are two studies for the Spanish case in which this estimate is made: those by Albert and Malo (1995)48 and Riera et al (2007)49. In the former, the value (in 2000 euros)50 is 2.98 million euros per year of life, while the latter includes two estimates of 2.04 and 2.69 million euros. The calculation of pain and suffering costs includes the present value of future impacts when the accident does not lead to a full return to work. In the case of accidents that lead to a full return to work, these costs (CPATP) would therefore be the result of multiplying the proportion represented by the days absent from work within the total of one year by the value of one year, weighted by the appropriate disability index. These costs would therefore be calculated as: CPATP = (DB/365) * VVH * IDIS However, in accidents that did not lead to a full return to work, the calculation of these costs (CPATnoP) would be: 47 Viscusi, W.K. and Aldy, J.E. (2003), “The Value of Statistical Life: a Critical Review of Market Estimates throughout the World”, Journal of Risk and Uncertainty, 27, 5-76. 48 Albert, C. and Malo, M.A. (1995), “Wages differences and valuation of human life in Spain”, Moneda y Crédito, 20, 87-125. 49 Riera, A., Ripio, A.M. and Mateu, J. (2007), "Estimation of the statistical value of life in Spain: An application of the hedonic wages model”, Spanish Ministry of Economy and Finance, 181, 29-48 50 The reference in 2000 euros is because the second study uses data for the period 1997-2000.

42

EV - EA

CPATnoP = Σ VVH * IDIS i = 1 (1 + d)i We assume pain and suffering costs start when the accident takes place (EA) and continue until the death of the worker (EV). CPAT = CPATP + CPATnoP Because the value of one year of life has been calculated based on the estimate of a wages equation, this valuation includes the valuation of the impact of other factors which are included in previous valuations. In order to avoid double accounting, these effects must eliminate the pain and suffering costs calculated previously. The net costs of these effects (CPAT*) are calculated by subtracting the production maintenance costs, the long term loss of income, legal costs, travel costs and other costs attributable to the worker. In other words, the net cost of pain and suffering would be: CPAT* = CPAT – CMPT – CCHT – CLEGT – CDEST - CALTRT

43

6. The relationship between the methodological proposal for Catalonia and the inventory of socio-economic costs The most important cost categories in the inventory of socio-economic costs published by the European Agency for Health and Safety at Work are included in the proposal for Catalonia. Each of the inventory's categories and how they correspond with the methodology proposed for Catalonia are listed below. 6.1. Costs to individuals The following categories of costs to individuals are defined in the inventory:

• Health • Quality of life • Distress and suffering • Loss of current income • Potential losses

• Health

This is defined as expenditure on healthcare that is not covered by the insurance policy or the employer. This includes items such as hospitalization, non-hospital treatment and medicines. In Catalonia, mutual insurance companies for work-related accidents and illnesses cover 100% of healthcare costs, and are therefore not included as a category of costs to be borne by the worker. This category also includes adaptation of the homes of the workers who have suffered from accidents. In the methodology proposed for Catalonia, these costs are included in the category of other costs (CALTR) under the heading of specific equipment costs (CEE).

• Quality of life, distress and suffering This attempts to assign a monetary value to how the quality of life of the worker and that of his/her friends and relations is affected after a work-related accident or illness. In the proposal for Catalonia, we included these costs in the pain and suffering costs category (CPAT). We will limit ourselves to the pain and suffering of the individual but not of their friends and family. As the willingness to pay techniques used to make this type of estimates are not the most reliable, we prefer to limit the scope of this category.

• Loss of current income and potential losses of future earnings The loss of current income category includes the loss of income from the current job and from a second job.

44

The potential losses of future earnings category includes the difference between anticipated total future earnings and the total for robust compensation and pensions and a second job. In the methodology proposed for Catalonia, these costs are included in two sections, with a distinction made between short- and long-term loss of income. In the short term, while the individual is absent from work, the loss of income will be due to the difference between the wage that he/she received and the temporary disability benefit. This is calculated in the section on the production maintenance cost borne by the worker who has suffered the accident (CMPT). Long-term loss of income is calculated under the heading long-term loss of income borne by the worker (PILPT). It is equivalent to the total income during a worker's working life that is lost when he/she cannot return to the job which he/she held beforehand after a work-related accident or illness. It is calculated as the difference between the present value of the wages before the work-related accident or illness and the present value of the income received after the work-related accidents or illness. This income may be from a second job or from a benefit.

• Expenditure not covered by insurance policies or compensation This transport costs, hospital visit costs and funeral costs, among others. These costs are included in the travel costs and funeral costs category which are part of the administration costs section (CADM). 6.2. Costs to businesses The following categories of costs to companies are defined in the inventory:

• Costs linked to fatal accidents, early retirement and disability. • Damages, legal costs, fines. • Other costs not related to health (e.g. investigation, management time, external

costs) • Temporary absence from work or disability • Production time lost, services not rendered • Loss of opportunities • Non-medical rehabilitation • Administration of absences due to illness, injuries, etc. • Equipment damaged • Effects on variable items of insurance premiums, premiums of high risk

insurance policies • Extra wages, payments for dangerous work (if the employer can choose) • Lack of profits on investments • Costs linked to fatal accidents, early retirement and disability. Damages, legal

costs, fines.

45

The costs linked to fatal accidents, early retirement and disability are the total costs of the activities after a fatal accident or an accident which leads to disability or early retirement. The costs linked to damages, legal costs and penalties are the total amount of penalties, fines and payments payable by the employer. They are included in the administration costs in the proposal for Catalonia (CADM). The cost categories are the cost of legal proceedings borne by the employer (CLEGE), the fines, penalties and compensation arising from legal proceedings (CMSIE).

• Other costs not related to health (e.g. investigation, management time, external costs)

This is considered to be the time and money allocated to investigating injuries and assessment of the workplace (a result of the work-related accidents and illnesses occurring). We have included these in the accident investigation costs (CINVE) within the administration costs (CADM) in the proposal for Catalonia.

• Temporary absence from work or disability This is defined as the amount of time of work lost due to absence. In the proposal for Catalonia, we assume that production is not lost when a work-related accident or illness occurs, but instead additional labor is recruited to cover absences. As mentioned in the case of work-related accidents and illnesses that are considered minor, we assume that the absences will be covered by overtime hours worked by other workers in the company (payment of overtime hours, PH). When the accidents and illnesses are serious, very serious or fatal, a new worker is recruited (replacement and training costs, CSF). We will therefore not calculate the costs of working time lost, but instead the additional cost to the employer of arranging overtime hours or recruiting new personnel to replace the workers who have suffered from an accident or who are ill.

• Production time lost, services not rendered and loss of opportunities The category of production time lost and services not rendered accounts for the loss of production time as a consequence of the event leading to an injury (e.g. because time is required to replace machinery, and production must be halted during the investigation). The loss of opportunities category accounts for orders lost or obtained and competitiveness in specific markets. As we assume that production is not lost in the proposal for Catalonia, we will not calculate these categories.

46

• Non-medical rehabilitation This is money invested by the employer to facilitate the return to work (advice, training, adjustments in the workplace). This costs category is associated with work-related accidents and illnesses of a serious nature. In the proposal for Catalonia, we assume that people with serious, very serious and fatal injuries are replaced by a new worker. The accident victim or ill worker does not return to work, and therefore the employer does not have to incur expenses to facilitate the return to work. For this reason, it is not included in the proposal for Catalonia.

• Administration of absences due to illness, injuries, etc. These are the (management) activities that the employer must undertake which are related to episodes of temporary disability. They are calculated based on the total wages for the time required by the workers carrying out administration tasks. This category is not defined in the proposal for Australia or the one for New Zealand. It is not clear how to calculate how many additional workers are needed to administer work-related accidents or illnesses among the personnel necessary to administer absences due to non-work-related accidents or illnesses. For this reason, it is not included in the proposal for Catalonia.

• Extra wages, payments for dangerous work (if the employer can choose) This costs category includes extra expenditure on higher wages for dangerous or uncomfortable work. This extraordinary wage is paid regardless of whether a work-related accident or illness occurs. For this reason, we have not considered it as an additional cost arising as a consequence of an accident or disease, and it is therefore not included in the proposal for Catalonia.

• Damaged equipment, effects on variable items in insurance premiums and the lack of profits on investments.

These categories require very specific information on each accident or illness and on each specific employer in order to be accounted for correctly. They are not included in the methodology used in Australia and New Zealand, and we have not included them in the proposal for Catalonia. 6.3. Costs to society As mentioned above, the disadvantage of the proposal by Mossink and de Greef (2002) is that its definition of society includes the injured worker and the employer where the accident takes place. This means that their list of variables is basically the same as those for the other two agents. To a certain extent this is double accounting, as the costs to society in this approach could be a type of total costs.

47

In the proposal for Catalonia, we attributed the costs that are not assumed by the worker or the employer to society. We will basically allocate to this category the healthcare costs covered by a mutual insurance companies, the disability benefits paid by both insurance companies and the Social Security and the taxes that the State no longer receives from accident victims or ill workers. In any event, we will discuss the categories that have been included in the inventory in costs to society. The following categories of costs to society are defined in the inventory:

• Health • Deaths • Quality of life • Distress and suffering • Current losses of production • Loss of earnings and potential future production • Loss of production due to incapacity of personnel and interruptions to

production • Costs and damages not related to health • Equipment damaged (due to accidents) • Administration of absences due to illness, etc.

• Health

This category includes expenditure on healthcare covered by insurance companies for work-related accidents and illnesses. This includes items such as hospitalization, non-hospital treatment and medicines. In Catalonia, mutual insurance companies for work-related accidents and illnesses cover 100% of healthcare costs and are included in the healthcare costs category (CMRS). This category also includes adapting the homes of the accident victims. In the methodology proposed for Catalonia, these costs are included in the category of other costs (CALTR) under the heading of specific equipment costs (CEE). In principle, we assign all these costs to the worker. However, if the information was available, we could make an estimate on the weight borne by society in this cost category.

• Death, quality of life, distress and suffering We assume that the loss of quality of life, distress and suffering are costs borne exclusively by the worker suffering from them. They should not be included in the definition of society as used in this study.

• Loss of current income and potential losses of future earnings

48

The category of loss of current income includes the loss of income due to temporary disability and the loss of income throughout the entire period of permanent disability. We considered that the financial load borne by the society linked to the days absent from work are the temporary and permanent disability benefits that must be paid to the workers. These costs are included in the categories of temporary disability benefits (SIT) (in production maintenance costs) and the current value of permanent disability benefits (VPPIP) (in long-term loss of income).

• Loss of production due to incapacity of personnel and interruptions to production.

This would be the market price of the production lost. As we assume that no production is lost in the proposal for Catalonia, we do not calculate this category.

• Costs and damages not related to health The inventory does not explain in detail which items are included in this category. We have not included them in the proposal for Catalonia.

• Equipment damaged (due to accidents) This cost is in principle assumed by the employer. If its machinery is insured, we can assume that it is a cost attributable to society. In any event, as mentioned above, in order to allocate it correctly we would need specific information on each particular event. It is not included in the proposal for Catalonia.

• Administration of absences due to temporary disability, etc. These costs are associated with the management of payments or collection of taxes. In the proposal for Catalonia they are in the deadweight loss category (CTRAN).

49

7. Cost of work-related accidents and illnesses for 2006 and 2007 We present the result of the calculation of work-related accident and illness costs below, based on the methodological proposal presented in the fifth section. A detailed description of how each of the cost categories has been calculated is included in the methodological appendix at the end of this study. 7.1. Categories calculated Seven categories were originally defined in the proposal for Catalonia:

• Costs associated with maintenance of production (CMP) • Loss of long-term income (PILP) • Healthcare costs (CMR) • Administration costs (CADM) • Deadweight loss (CTRAN) • Other costs (CALTR) • Pain and suffering costs (CPAT)

Based on the data available for work-related accidents and illnesses at the end of this study, we have been able to calculate four of the seven categories defined: production maintenance costs (CMP), loss of long-term income (PILP), healthcare costs (CMR) and pain and suffering costs (CPAT). These are the most important categories in the studies of Australia and New Zealand. Although we were unable to calculate all the categories, and the total cost is therefore underestimated, the categories that we did not calculate account for only 11.45% and 11.96% of the total costs of Australia and New Zealand. As a result, although this is a limitation of our analysis, we have included the most important categories in the methodology presented. 7.2. Categories not calculated In this first version of the study, we have been unable to obtain sufficient information to calculate the categories of administration costs (CADM), deadweight loss (CTRAN), and other costs (CALTR). In the case of administration costs, we were unable to find a database with information on the fines, penalties and compensation arising from legal proceedings. In order to calculate these, we would also need to have a reliable estimate of the proportion of work-related accidents and illnesses that are resolved judicially, the average cost associated with legal proceedings and weekly investigation of work-related accidents and illnesses. Future studies may concentrate on finding or creating new databases with reliable information on legal issues.

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In order to be able to calculate the deadweight loss category, we would need to find a study for Catalonia which quantifies the costs associated with management of payments or collection of taxes. Finally, the "other costs" category must include payments to caregivers and special equipment. These costs are assumed to be met by the workers and society. Part of the aid given by the State for these expenses is included in the long-term loss of income section. The pensions for serious disability include 50% of the calculation basis as payment for a caregiver. However, these are only the most extreme cases, and we do not know the percentage of costs covered by the aid. The application of the Dependence Law will probably provide more accurate figures to facilitate a reasonable estimate of these costs in the future. In the case of work-related illnesses, we had very little information at the conclusion of this study, and the information we had was only for 2006. 7.3. Results

- Work-related accidents and illnesses in Catalonia in 2007 cost 1,904 million euros. - With a total of 182,862 accident victims, the cost per affected person in 2007 is 10,415 euros. - The cost of accidents occurring in Catalonia in 2006 are 1,884 million 2006 euros. After adjustment for inflation, this figure is 1,963 million 2007 euros. - With a total of 188,102 accident victims, the cost per affected person in 2006 was 10,437 2007 euros. - The distribution of costs by economic agent and by category was practically the same for 2006 and 2007. - The costs generated by work-related illnesses in 2006 in the two categories which we have been able to calculate (production maintenance and healthcare costs) are equivalent to 19 million 2007 euros.

Table 1

2006 Category Employer Worker Society Total Total in 2007 €

Production maintenance cost

147 39 167 353 368

Long term loss of income

61 231 292 304

Medical costs 163 163 169 Pain and suffering costs

1,176 561 1,884 1,963

Total 147 1,176 561 1,884 1,963 million euros

Number of cases: 188,102 Cost per capita: 10.437 IPC: 4.2%

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2007

Category Employer Worker Society Total Production maintenance cost

143 39 162 344

Long term loss of income

59 228 287

Medical costs 168 168 Pain and suffering costs

1,077 1.077

Total 143 1,175 558 1.876 million euros

Number of cases: 182,862 million euros Cost per capita: 10,415 The pain and suffering costs are the category with the most weight within the total costs, with 57% in 2006 and 58% in 2007. They are followed by production and maintenance costs, with 19% in 2006 and 18% in 2007. The loss of long-term income is 15% of the total costs for both years. Finally, healthcare costs are equivalent to 9%.

The distribution of the costs between the three economic agents defined is also practically identical in both years.

The worker bears most of the costs - 62% in 2006 and 63% in 2007. The employer bears 8% in 2006 and 7% in 2007, and society bears 30% in each year. As mentioned above, we have very little information on work-related illnesses. We only have some data for 2006, which using the figures for the variables of duration and

52

calculation basis, enabled us to calculate the categories of production maintenance and healthcare costs. Table 2

Illnesses 2006 Category Employer Worker Society Total Total in € 2007

Production maintenance cost

6 2 7 15 15

Medical costs 4 4 4 Total 6 2 11 19 19

million euros The costs generated by work-related illnesses in 2006 which we have been able to calculate are equivalent to 19 million 2007 euros. A breakdown in the cost categories for the years 2006 and 2007 is given below. The results for 2006 given here are updated for year-on-year inflation, which is 4.2%. In other words, the results for 2006 are expressed in 2007 euros. We will thereby be able to compare the results for the two years. 7.3.1. Costs of accidents associated with maintenance of production of accident and illness victims Table 3 shows the result of each of the items used to calculate the production maintenance cost separately. Table 3

2006 Category Employer Worker Society Total Total in €

2007 Payment of overtime hours 70 70 73 Social security of the accident victim 71 71 74 Employer excess payment 5 5 5 Replacement and training costs 1 1 1 Loss of income by the worker 39 39 41 Temporary disability benefit 159 159 165 Taxes not collected 8 8 8 Total 147 39 167 353 368

million euros

2007 Category Employer Worker Society Total

Payment of overtime hours 68 68 Social security of the accident victim 69 69 Employer excess payment 5 5 Replacement and training costs 1 1 Loss of income by the worker 39 39 Temporary disability benefit 154 154 Taxes not collected 8 8 Total 143 39 162 344

million euros

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Temporary disability benefit accounts for 45% of the production and maintenance costs in both years (165 million euros in 2006 and 154 million euros in 2007). Other important categories, amounting to 20%, are additional social security payments (74 million euros in 2006 and 69 million euros in 2007) and payments of overtime hours (73 million euros in 2006 and 2007)

In the distribution of costs by economic agent, we can see that the employer bears 42% of the costs, the worker 11% and society 47%.

7.3.2. Long-term loss of income Table 4 shows the result of each of the items used to calculate the loss of long-term income separately. Table 4

2006 Category Employer Worker Society Total Total in

2007 € Worker's loss of income (long term)

61 61 63

Permanent benefits 213 213 222 Loss of taxes 19 19 19 Total 61 232 293 304

million euros

2007 Category Employer Worker Society Total

Worker's loss of income (long term)

58 58

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Permanent benefits 208 208 Loss of taxes 21 21 Total 58 229 287

million euros The figures for permanent disability benefit are 73% in 2006 (222 million euros) and 72% in 2007 (208 million euros) of the long-term income loss category. 21% is the worker’s loss of current income (64 million euros in 2006 and 59 million euros in 2007). Finally, 6% in 2006 (19 million euros) and 7% in 2007 (21 million euros) are the loss of taxes to the State.

As regards distribution of costs by economic agent, 79% in 2006 and 80% in 2007 are borne by society. The worker bears the remaining 21% and 20%, while the employer is not involved in this category.

7.3.3. Healthcare costs of accident and illness victims The healthcare costs caused by work-related accidents (169 million euros in 2006 and 168 million euros in 2007) are borne entirely by society. Table 5

2006 Category Employer Worker Society Total Total in €

2007 Medical and rehabilitation costs 163 163 169 Total 163 163 169

million euros

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2007 Category Employer Worker Society Total

Medical and rehabilitation costs 168 168 Total 168 168

million euros 7.3.4. Pain and suffering costs The pain and suffering costs presented in table 6 are borne entirely by the workers. The net loss of pain and suffering was 1,121 million euros in 2006 and 1,077 million euros in 2007. This category is the most important, and accounts for slightly less than 60% of the total costs. Table 6

2006 Category Employer Worker Society Total Total in €

2007 Pain and suffering with full return to work

91 91 95

Pain and suffering with no return to work

1,085 1,085 1,131

Gross total 1,176 1,176 1,226 Net total 1,076 1,076 1,121

million euros The financial impact of the worker on the categories associated with production maintenance costs and long-term loss of income must be deducted from the gross cost of pain and suffering. Worker’s loss of income (short-term) 39 Worker’s loss of income (long-term) 61 Total 100

2007 Category Employer Worker Society Total

Pain and suffering with full return to work

82 82

Pain and suffering with no return to work

1,093 1,093

Gross total 1,174 1,174 Net total 1,076 1,076

million euros

Worker’s loss of income (short-term) 39 Worker’s loss of income (long-term) 59 Total 98 Most of the costs arise from pain and suffering costs in the long term.

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7.4. Costs of work-related illnesses As mentioned above, for work-related illnesses we have only been able to calculate the production and maintenance costs and healthcare costs for 2006. The categories of long-term loss of income and the cost of pain and suffering have therefore yet to be calculated. We also had no access to information for 2007. This situation forces us to consider healthcare costs separately, as we do not have enough information to include them in the total. We set out the results of the categories calculated in detail below. 81% (15 million euros) of the figures we have been able to calculate can be allocated to production maintenance costs and 19% (4 million euros) to healthcare costs.

As regards the proportion of costs per sector, 57% are borne by society, 33% by the employer and 10% by the worker. 7.4.1. Costs of work-related illnesses associated with maintenance of production Table 7

Illnesses 2006 Category Employer Worker Society Total Total in

€ 2007 Payment of overtime hours 3 3 3 Social security of the accident victim

3 3 3

Employer excess payment 0 0

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Replacement and training costs

0 0 0

Loss of income by the worker 2 2 2 Temporary disability benefit 7 7 7 Taxes not collected 0 0 0 Total 6 2 7 15 15 Temporary disability benefit costs account for 44% of production maintenance costs associated with work-related illnesses. Payments for overtime hours and to the social security account for 21% and 20% respectively.

By sectors, 41% of the costs are borne by the employer, 12% by the worker and 47% by society. 7.4.2. Healthcare costs of work-related illnesses Healthcare costs (5 million) are assumed entirely by society. Table 9

Illnesses 2006 Category Employer Worker Society Total Total in €

2007 Medical and rehabilitation costs

4 4 4

Total 4 4 4 7.5. Comparison of the results of Catalonia with those for New Zealand In the following section, we compare the results obtained in Catalonia with those in New Zealand. Although the theoretical framework is similar, there are significant differences in terms of the distribution of the costs. This is due basically to methodological differences in the calculation of some of the categories, to differences in each country's legislation and health-care system, and differences in the composition of the database.

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It is clear that in both countries, the agent absorbing the largest proportion of costs is the worker (63% in Catalonia and 89% in New Zealand), followed by society, with 29% in Catalonia and 10% in New Zealand and finally the employer, with 8% in Catalonia and 1% in New Zealand. As regards distribution by category, we can see that the cost of pain and suffering is the most important category in both countries (58% in Catalonia and 79% in New Zealand). Despite this, its relative weight is less important in Catalonia than in New Zealand.

When making comparisons, the differences between the structures of the two countries' databases must be taken into account. In New Zealand, there are seven defined levels of seriousness, based on the amount of days absent from work and on the return to work. In Catalonia, there are only four levels of seriousness, based on the opinion of the doctor treating the accident victim. This leads to significant differences when calculations are made, as in Catalonia we considered the accident victims in the last three categories (0.4% of the database) to be those suffering from long-term after-effects. However, in the study of New Zealand, accident victims with long-term side-effects were deemed to be those in the last five categories, or 3.06% of the database.

Number of people considered in each category of seriousness

New Zealand Cases % by category % minor / serious

< 7 days 230,546 90.83% < 7 days and full return to work 15,494 6.10%

96.94%

> 7 days and staggered return to work 6,222 2.45%

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< 7 days and partial return to work 215 0.08% No return to work 30 0.01% Death 64 0.03% Others 1241 0.49%

0.94%

Total 253,812 100.00% 100%

Catalonia 2007 Cases % by category % minor / serious

Minor < 7 days Minor > = 7 days

44,118 137,032

24.13% 74.94%

99.06%

Serious Very serious Death

1.492 56

164

0.82% 0.03% 0.09%

0.94%

Total 182,862 100.00% 100.00% Apart from the type of injury suffered by each accident victim, if the injuries are similar, then the costs arising from an injury that leads to after-effects will obviously be greater than the costs of an injury that does not. These 21 percentage points of difference in the pain and suffering costs are distributed between maintenance costs and healthcare costs. The loss of long-term income is 15% of the total costs for both countries. Production maintenance costs account for 18% of total costs in Catalonia and only 3% of total costs in New Zealand. We have made some changes to the calculation of production maintenance costs to adapt it to the structure of Catalonia. We have added the category of costs associated with social security payments for the accident victim, and modified the calculation of uncollected taxes. In the category of healthcare costs, it is apparent that while in Catalonia these are 9% of total costs, in New Zealand they are equivalent to 3% of total costs. In this case the calculation methodology is very different, as the healthcare system in New Zealand is very different from that in Catalonia.

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8. Analysis of results We present the results broken down in various categories: gender, age, level of seriousness, sector of work, type of injury, part of the body injured and whether the worker was foreign. These categories only take into account workers who are accident victims, as we do not have enough reliable information to be able to present data for work-related illnesses. We present the number of cases for each category, the cost in euros, the cost per capita, the working days lost and the average number of days lost per person. Cost by gender

2006 Sex No. of cases % € € 2007 % € 2007 per

capita Men 140,617 75% 1,560 1,625 83 11,558 Women 47,485 25% 324 338 17 7,117 Total 188,102 100% 1,884 1,963 100 10,437

million euros

Sex Days absent from work

% Days/number of cases

Men 3,056,128 74% 22 Women 1,095,726 26% 23 Total 4,151,854 100% 22 In 2006 men were the victims of 75% of accidents in Catalonia, while women accounted for the other 25%. The cost per accident for women (7,117 euros) is lower than that for men (11,558 euros) although they spend on average one day more away from work than men (23 vs. 22). The figures for 2007 are very similar to those for 2006.

Sex No. of cases % € % € per capita Men 134,851 74% 1,558 83% 11,555 Women 48,011 26% 316 17% 6,590 Total 182,862 100% 1,875 100% 10,251

million euros

Sex Days absent from work

% Days/number of cases

Men 2,797,530 73% 21 Women 1,054,806 27% 22 Total 3,852,336 100% 21

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Cost by age group We divide the population into four age groups.

2006 Age No. of cases % € € 2007 % € 2007 per

capita From 16 to 24 30,765 16% 238 248 13% 8,077 From 25 to 34 63,647 34% 613 639 33% 10,034 From 35 to 44 47,825 25% 476 496 25% 10,368 From 45 to 54 31,305 17% 362 378 19% 12,059 Over 55 14,560 8% 195 203 10% 13,926 Total 188,102 100% 1,884 1,963 100% 10,437

million euros

Age Days absent from work

% Days/number of cases

From 16 to 24 522,382 13% 17 From 25 to 34 1,256,989 30% 20 From 35 to 44 1,089,056 26% 23 From 45 to 54 826,115 20% 26 Over 55 457,312 11% 31 Total 4,151,854 100% 22 The largest group of workers who were accident victims were between 25 and 34 years old (34%). They are followed by those aged between 35 and 44 years old (25%) and those between 45 and 54 years old (17%). The conclusion that can be drawn is that as the age of the worker increases, the costs per capita increase. The situation is similar in the durations of absences according to age groups. As the worker gets older, the average number of days of absence per case increases. We can see the same for the 2007 results.

2007 Age No. of cases % € % € per capita

From 16 to 24 28.158 15% 241 13% 8.565 From 25 to 34 60.147 33% 535 29% 8.899 From 35 to 44 48.079 26% 496 26% 10.324 From 45 to 54 31.604 17% 399 21% 12.622 Over 55 14.874 8% 203 11% 13.642 Total 182.862 100% 1.875 100% 10.251

million euros

Age Days absent from work

% Days/number of cases

From 16 to 24 474.612 12% 17 From 25 to 34 1.147.083 30% 19 From 35 to 44 1.031.684 27% 21 From 45 to 54 776.595 20% 25 Over 55 422.362 11% 28 Total 3.852.336 100% 21 Cost by seriousness of case Four categories of seriousness were defined: minor, serious, very serious and fatal.

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2006 Real

seriousness No. of cases % € € 2007 % € 2007 per

capita Minor 186.425 99% 738 769 39% 4.123 Serious 1.399 1% 656 683 35% 488.277 Very serious 78 0% 41 43 2% 552.486 Fatal 200 0% 450 468 24% 2.342.278 Total 188.102 100% 1.884 1.963 100% 10.437

million euros

Real seriousness

Days absent from work

% Days/number of cases

Minor 3.922.820 94% 21 Serious 214.510 5% 153 Very serious 14.412 0% 185 Fatal 112 0% 1 Total 4.151.854 100% 22 99% of work-related accidents were considered minor, 0.7% were serious and 0.04% very serious. 0.1% were fatal. The cost per capita of a serious accident is 12.9 times higher than that of a minor accident. This ratio increases to 14.4 for very serious accidents. As regards the duration of absences, while work-related accidents considered minor lead to an average of 21 days' absence, serious and very serious accidents lead to an average of 152 and 185 days respectively. The results for 2006 are similar to those for 2007, which are shown below.

Real seriousness

No. of cases % € % € 2007 per capita

Minor 181.150 99% 707 38% 3.901 Serious 1.492 1% 760 41% 509.658 Very serious 56 0% 31 2% 552.873 Fatal 164 0% 377 20% 2.296.484 Total 182.862 100% 1.875 100% 10.251

million euros

Real seriousness

Days absent from work

% Days/number of cases

Minor 3.639.498 94% 20 Serious 201.416 5% 135 Very serious 11.099 0% 198 Fatal 323 0% 2 Total 3.852.336 100% 21 Cost by sector of work We use the Catalan Classification of Economic Activities (Rev 1) grouped by sections in order to define the sectors of work.

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2006 Sector of work No. of cases % € € 2007 % € 2007

per capita Agriculture and farming 2.538 1% 26 27 1 10.771 Fishing 425 0% 4 4 0 9.162 Mining industries 562 0% 14 14 1 25.694 Manufacturing industries 55.212 29% 467 487 25 8.821 Electricity, gas and water 589 0% 14 14 1 24.474 Construction 38.685 21% 478 498 25 12.865 Retail and repairs 25.059 13% 200 209 11 8.324 Hostelry 9.776 5% 83 87 4 8.861 Transport and communications

10.844 6% 153 159 8 14.688

Financial brokerage 698 0% 15 16 1 22.331 Real estate and rentals 20.791 11% 214 223 11 10.735 Civil service, defense and Social Security

7.525 4% 77 81 4 10.702

Education 1.319 1% 17 18 1 13.368 Healthcare and services 6.573 3% 53 55 3 8.325 Other social activities 7.434 4% 69 72 4 9.638 Domestic staff 67 0% 1 1 0 8.188 Extra-territorial bodies 5 0% 0 0 0 11.524 Total 188.102 100% 1.884 1.963 100% 10.437

million euros 50% of the accidents occur in the manufacturing industry (29%) and construction sector (21%). As regards the cost per accident victim, the highest value was in the mining industries sector (25,694 euros). It is followed by the electricity, gas and water sector (24,474 euros) and the financial brokerage sector (22,331 euros). Domestic staff (8,188 euros), retail and repairs (8,324 euros) and healthcare and social services (8,325 euros) are the sectors with the lowest costs per accident victim.

2006 Sector of work Days absent from

work % Days / no. of

cases Agriculture and farming 57.042 1% 22 Fishing 11.837 0% 28 Mining industries 13.821 0% 25 Manufacturing industries 1.156.885 28% 21 Electricity, gas and water 13.138 0% 22 Construction 851.234 21% 22 Retail and repairs 530.811 13% 21 Hostelry 205.827 5% 21 Transport and communications 265.788 6% 25 Financial brokerage 20.795 1% 30 Real estate and rentals 451.727 11% 22 Civil service, defense and Social Security 201.830 5% 27 Education 35.484 1% 27 Healthcare and services 165.734 4% 25 Other social activities 167.809 4% 23 Domestic staff 1.960 0% 29 Extra-territorial bodies 133 0% 27 Total 4.151.854 100% 22

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The financial brokerage sector has the lowest average number of days of absence from work (30 days). The sectors linked to household work (29 days) and fishing (28 days) are close behind. Some differences are apparent in 2007.

Sector of work No. of cases % € % € 2007 per capita

Agriculture and farming 2.519 1% 44 2% 17.338 Fishing 377 0% 2 0% 5.118 Mining industries 590 0% 9 0% 15.507 Manufacturing industries 50.749 28% 443 24% 8.737 Electricity, gas and water 652 0% 12 1% 18.173 Construction 37.615 21% 452 24% 12.023 Retail and repairs 25.352 14% 212 11% 8.359 Hostelry 9.083 5% 93 5% 10.262 Transport and communications 11.612 6% 172 9% 14.793 Financial brokerage 631 0% 17 1% 26.853 Real estate and rentals 20.309 11% 183 10% 9.035 Civil service, defense and Social Security

7.399 4% 82 4% 11.080

Education 1.361 1% 18 1% 13.057 Healthcare and services 7.385 4% 65 3% 8.801 Other social activities 7.084 4% 66 4% 9.279 Domestic staff 127 0% 2 0% 17.197 Extra-territorial bodies 17 0% 2 0% 139.791 Total 182.862 100% 1.875 100% 10.251

million euros The highest cost per accident victim was in the extra-territorial bodies sector. This figure is very different to the one we obtained for 2006. This may to a large extent be due to the fact it is a sector for which we have few data, which means a low level of representation of this data. In this case, the difference is explained by discrepancies between the two samples. There were 5 minor accidents in 2006, and 16 minor accidents and one death in 2007. The fatal accident has a pain and suffering cost of 2,244,664 euros, which significantly increases the cost of pain and suffering per capita in extra-territorial bodies for 2006.

2007 Sector of work Days absent

from work % Days / no.

of cases Agriculture and farming 54.893 1% 22 Fishing 9.065 0% 24 Mining industries 15.777 0% 27 Manufacturing industries 1.022.167 27% 20 Electricity, gas and water 15.556 0% 24 Construction 773.986 20% 21 Retail and repairs 513.439 13% 20 Hostelry 190.772 5% 21 Transport and communications 268.174 7% 23 Financial brokerage 19.702 1% 31 Real estate and rentals 423.396 11% 21 Civil service, defense and Social Security 180.333 5% 24 Education 33.892 1% 25 Healthcare and services 175.419 5% 24 Other social activities 151.229 4% 21 Domestic staff 4.101 0% 32 Extra-territorial bodies 435 0% 26 Total 3.852.336 100% 21

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The sectors linked to work in the home have the highest average number of days of absence from work (32 days). Financial brokerage (31 days) and mining industries (27 days) are the sectors with the next highest figures. Cost by job We used the national occupations classification (CNO_94) grouped at large group level to define the various occupations.

2006 Occupation No. of

cases % € € 2007 % € 2007 per

capita Armed forces 1.780 1% 13 14 1% 7.660 Administrative employees 7.514 4% 94 98 5% 13.011 Manufacturing, construction and mining workers

57.004 30% 608 634 32% 11.114

Skilled workers, agricultural and fishing

2.054 1% 24 25 1% 12.086

Government and business managers

417 0% 12 12 1% 29.500

Unskilled workers 51.602 27% 445 463 24% 8.978 Installations and machinery operators, and fitters

29.928 16% 312 325 17% 10.864

Scientific technicians and professionals, academics

3.744 2% 63 65 3% 17.445

Technicians and support professionals

6.550 3% 96 100 5% 15.262

Restaurant and personal services and retail workers

27.509 15% 218 227 12% 8.267

Total 188.102 100% 1.884 1.963 100% 10.437 million euros

The occupation with the largest number of accident victims is manufacturing, construction and mining workers (30%), followed by unskilled workers (27%) and operators of installations and machinery and fitters (16%). Government and business managers are the occupations with the longest absences (38 days), followed by technicians and scientific and academic professionals (29 days).

2006 Occupation Days absent from

work % Days/no. of cases

Armed forces 38.068 1% 21 Administrative employees 190.726 5% 25 Manufacturing, construction and mining workers 1.225.796 30% 22 Skilled workers, agricultural and fishing 47.531 1% 23 Government and business managers 15.761 0% 38 Unskilled workers 1.074.519 26% 21 Installations and machinery operators, and fitters 668.461 16% 22 Scientific technicians and professionals, academics 109.954 3% 29 Technicians and support professionals 170.872 4% 26 Restaurant and personal services and retail workers 610.167 15% 22 Total 4.151.854 100% 22 The distribution by occupation of the costs of work-related accidents and days of absence from work in 2006 is very similar to that for 2007.

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Occupation No. of cases

% € % € 2007 per

capita Armed forces 1.960 1% 18 1% 9.188 Administrative employees 7.681 4% 88 5% 11.510 Manufacturing, construction and mining workers

54.783 30% 565 30% 10.318

Skilled workers, agricultural and fishing 1.951 1% 20 1% 10.002 Government and business managers 418 0% 18 1% 43.424 Unskilled workers 50.241 27% 437 23% 8.695 Installations and machinery operators, and fitters

28.497 16% 317 17% 11.118

Scientific technicians and professionals, academics

3.912 2% 67 4% 17.024

Technicians and support professionals 6.345 3% 122 7% 19.210 Restaurant and personal services and retail workers

27.074 15% 223 12% 8.241

Total 182.862 100% 1.875 100% 10.251 million euros

2007

Occupation Days absent from work

% Days/no. of cases

Armed forces 39.185 1% 20 Administrative employees 184.408 5% 24 Manufacturing, construction and mining workers 1.118.868 29% 20 Skilled workers, agricultural and fishing 41.239 1% 21 Administration and business managers 13.660 0% 33 Unskilled workers 996.614 26% 20 Installations and machinery operators, and fitters 608.041 16% 21 Scientific technicians and professionals, intellectuals

105.004 3% 27

Technicians and support professionals 159.409 4% 25 Restaurant and personal services and retail workers 585.908 15% 22 Total 3.852.336 100% 21 Cost by type of injury We have defined 16 categories for the type of injury.

2006 Type of injury No. of cases % € € 2007 % € 2007 per

capita Unknown type of injury

2.250 1% 32 33 2% 14.756

Wounds 70.908 38% 272 283 14% 3.992 Fractures 12.351 7% 512 533 27% 43.169 Sprains 83.790 45% 314 327 17% 3.908 Amputations 369 0% 42 44 2% 118.952 Internal injury 6.652 4% 190 198 10% 29.776 Burns 2.733 1% 38 39 2% 14.362 Poisonings 266 0% 2 2 0% 7.970 Asphyxia 133 0% 8 8 0% 60.898 Effect of noise 78 0% 1 1 0% 12.841 Effect of temperature

156 0% 1 1 0% 6.295

Psychological 426 0% 12 12 1% 28.297 Multiple injuries 2.107 1% 243 254 13% 120.398 Heart attack, brain hemorrhage*

138 0% 130 135 7% 980.426

Type of injuries 5.745 3% 88 92 5% 15.996 Total 188.102 100% 1.884 1.963 100% 10.437

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Sprains account for 45% of the work-related injuries and wounds 38%. Despite this, in absolute terms, fractures are the injuries generating most costs (521 million euros). The most costly injuries are brain hemorrhages (980,426 euros per case), multiple injuries (120,398 euros per case) and amputations (118,952 euros per case).

2006 Type of injury Days absent from

work % Days/no. of

cases Unknown type of injury 51.720 1% 23 Wounds 1.195.635 29% 17 Fractures 716.293 17% 58 Sprains 1.710.761 41% 20 Amputations 27.444 1% 74 Internal injury 161.859 4% 24 Burns 48.424 1% 18 Poisonings 3.502 0% 13 Asphyxia 2.640 0% 20 Effect of noise 1.853 0% 24 Effect of temperature 1.741 0% 11 Psychological 11.492 0% 27 Multiple injuries 89.638 2% 43 Heart attack, brain hemorrhage* 11.093 0% 80 Type of injuries 117.761 3% 20 Total 4.151.854 100% 22 * Recognized as non-traumatic causes. Brain hemorrhages (80 days) and amputations (74 days) are the types of injury with the longest absences. There are no significant differences between 2007 and 2006.

Type of injury

No. of cases % € % € 2007 per capita

Unknown type of injury

2.183 1% 19 1% 8.585

Wounds 70.256 38% 269 14% 3.828 Fractures 11.911 7% 566 30% 47.520 Sprains 82.324 45% 322 17% 3.916 Amputations 300 0% 44 2% 148.045 Internal injury 6.475 4% 161 9% 24.817 Burns 2.463 1% 44 2% 18.021 Poisonings 284 0% 8 0% 29.197 Asphyxia 113 0% 5 0% 41.530 Effect of noise

171 0% 4 0% 22.878

Effect of temperature

133 0% 1 0% 6.112

Psychological 421 0% 11 1% 26.133 Multiple injuries

1.902 1% 251 13% 132.213

Heart attack, brain hemorrhage*

156 0% 125 7% 803.732

Type of injuries

3.770 2% 43 2% 11.530

Total 182.862 100% 1.875 100% 10.251 Millions of euros

* Recognized as non-traumatic causes.

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2007 Type of injury Days absent from

work % Days/no. of

cases Unknown type of injury 46.155 1% 21 Wounds 1.173.325 30% 17 Fractures 594.180 15% 50 Sprains 1.651.991 43% 20 Amputations 23.040 1% 77 Internal injury 146.939 4% 23 Burns 39.963 1% 16 Poisonings 4.461 0% 16 Asphyxia 1.718 0% 15 Effect of noise 3.432 0% 20 Effect of temperature 1.813 0% 14 Psychological 10.718 0% 25 Multiple injuries 69.483 2% 37 Heart attack, brain hemorrhage* 11.095 0% 71 Type of injuries 74.024 2% 20 Total 3.852.336 100% 21 * Recognized as non-traumatic causes. Part of the body injured We have defined nine categories of parts of the body injured based on the information available in the accident reports.

2006 Part of the body No. of cases % € € 2007 % € 2007 per

capita Unknown part of the body

1.236 1% 45 46 2% 37.593

Head 12.261 7% 168 175 9% 14.309 Neck 12.052 6% 55 58 3% 4.777 Back 32.057 17% 152 158 8% 4.936 Trunk 7.140 4% 151 158 8% 22.065 Upper limb 66.822 36% 412 429 22% 6.418 Lower limb 48.831 26% 460 479 24% 9.814 Body 6.737 4% 392 409 21% 60.660 Other parts of the body:

966 1% 49 51 3% 53.020

Total 188.102 100% 1.884 1.963 100% 10.437 millions of euros

The upper (22%) and lower limbs (24%) are the parts of the body to which the most money is allocated proportionally.

Part of the body Days absent from work

%  Days/no. of cases

Unknown part of the body 31.397 1%  25 Head 165.079 4%  13 Neck 263.604 6%  22 Back 549.561 13%  17 Trunk 155.266 4%  22 Upper limb 1.520.007 37%  23 Lower limb 1.227.870 30%  25 Body 214.160 5%  32 Other parts of the body: 24.910 1%  26 Total 4.151.854 100%  22

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The longest absences are linked to injuries in the body (32 days) and the lower limbs (25 days). The figures for 2007 are very similar to those for 2006.

2007 Part of the body No. of cases % € € per capita

Unknown part of the body

1.129 1% 19 17.184

Head 11.390 6% 155 13.627 Neck 11.599 6% 53 4.538 Back 31.127 17% 151 4.855 Trunk 7.295 4% 152 20.859 Upper limb 65.600 36% 419 6.384 Lower limb 47.627 26% 503 10.551 Body 6.401 4% 406 63.467 Other parts of the body: 694 0% 16 23.764 Total 182.862 100% 1.875 10.251

Million euros

Part of the body Days absent from work 

% Days/no. of cases

Unknown part of the body 26.302  1% 23 Head 146.089  4% 13 Neck 250.211  6% 22 Back 522.741  14% 17 Trunk 150.762  4% 21 Upper limb 1.424.028  37% 22 Lower limb 1.129.213  29% 24 Body 187.734  5% 29 Other parts of the body: 15.255  0% 22 Total 3.852.336  100% 21 Cost by nationality Finally, we consider the difference between Spanish and foreign workers.

2006 Nationality No. of cases % € € 2007 % € 2007 per

capita Foreign 28.984 15% 314 327 17% 11.294 Spanish 159.118 85% 1.570 1.636 83% 10.281 Total 188.102 100% 1.884 1.963 100% 10.437

million euros

Nationality Days absent from work

% Days/no. of cases

Foreign 559.634 13% 19 Spanish 3.592.220 87% 23 Total 4.151.854 100% 22 85% of accident victims were Spanish nationals and 15% were foreigners. We found that the cost per accident victim for a foreign worker (11,294 euros) is slightly higher than that of a Spanish worker (10,281 euros). We also found that foreign workers are absent for fewer days from work on average (19.31) than Spanish workers (22.58).

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The situation was slightly different in 2007. The cost per accident victim per foreign worker (9,567 euros) is slightly lower than that of a Spanish worker (10,403 euros).

Nationality No. of cases % € % € 2007 per capita

Foreign 33.211 18% 318 17% 9.567 Spanish 149.651 82% 1.557 83% 10.403 Total 182.862 100% 1.875 100% 10.251

Millions of euros Nationality Days absent

from work % Days/no. of

cases Foreign 623.625 16% 19 Spanish 3.228.711 84% 22 Total 3.852.336 100% 21

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9. Ten conclusions In this study, we have attempted to lay the foundations for the development of a methodology enabling a valuation of the cost of work-related accidents and illnesses in Catalonia. This preliminary exploratory analysis includes an overview of various areas, with a review of the most common generic classifications of work-related accident and illness costs, an inventory of the specific costs based on the agents suffering from the these costs, and a detailed analysis of the proposals and results of two projects in this area undertaken in Australia and in New Zealand. The basic aspects of a feasible methodological approach for the case of Catalonia have been established, and the sources of information initially available on the subject have been assessed. The conclusions of this report, which is no more than a starting point for a more ambitious project, can be summarized in the following ten points: - The valuation of the cost of work-related accidents and illnesses must be undertaken using a methodology that enables these costs to be broken down by type and by the agent (worker, employer and society) they affect, as in the studies carried out in countries such as Australia and New Zealand. - Although some authors do not categorize them as economic costs, the costs associated with pain and suffering must be taken into consideration, despite the difficulties in quantifying them correctly, in any valuation of costs of work-related accidents and illnesses, taking into account their human, social - and in the final analysis economic - importance. - Statistical work (data collection) is necessary to quantify as accurately as possible the importance of work-related accidents and illnesses which for various reasons do not lead to payment of compensation or an official report on the event concerned. - The information on work-related illnesses must be substantially improved in order to be able to reliably quantify the economic impact. - Estimates in the field of work-related accidents for the healthcare costs of work-related injuries and illnesses are required in as much detail as possible. - It seems advisable to use a statistical operation enabling quantification of the costs arising from work-related events that are connected to the expenditure by the affected parties (travel, medication and others), and the time spent by third parties on the accident victim. - The procedures used to make allocations in cases (totally or partially) lacking direct information for a variable must be refined. - A valuation of the cost of work-related accidents and illnesses involves establishing certain parameters (discount rates, life expectancy and others) in the calculation process. It therefore seems reasonable to analyze the sensitivity of the results to changes in the assumptions on these parameters.

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- The descriptive evidence is very clear: the probability of suffering from a work-related accident or illness is not the same for all workers. Ascertaining the profile of the individuals affected is important, making a distinction in terms of levels of seriousness and the type of accidents, among other factors. - Ascertaining the economic importance of costs associated with work-related accidents may contribute to decisions on the actions necessary in terms of occupational hazards prevention. In this regard, the individual information for each worker and employer in the survey of working conditions in Catalonia must enable analysis of to what extent the organizational aspects of occupational hazards prevention in companies have a significant effect on the harmful effects to health therein, with these results being the basis for introducing the improvements necessary to reduce work-related accidents and illnesses. Despite the interest in being able to quantify the intangible costs associated with pain and suffering, the fact of the matter is that saving a life is of incalculable value and any initiative in this direction has an infinite worth from the social and human point of view.

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METHODOLOGICAL APPENDIX 10. Calculation of work-related accident costs in Catalonia The first consideration is that due to a lack of information, we were unable to calculate all the cost categories that we considered initially. For work-related accidents, we have calculated the costs related with maintenance of production, the long-term costs, healthcare costs and pain and suffering costs. For work-related illnesses, we have calculated the costs related with maintenance of production and healthcare costs. We will begin by describing how the estimates of the durations and the basis for calculation of individuals with work-related illnesses were made. Finally, we will describe how we calculated each of the cost categories. 10.1. Estimated duration of absences from work and calculation basis for workers with work-related illnesses As mentioned above, we have no economic information for illnesses, or information on the duration of absences from work of the individuals suffering from them. To calculate the production maintenance costs we must therefore estimate the following variables. Calculation bases Based on the information we have on the accident victims we have calculated a model that enables us to estimate the daily calculation basis for a worker taking into account his/her age51, gender, the CCAE group to which he/she belongs and the occupation.

51 We introduce an age variable into the profile in order to be able to include the long-term age in effect correctly. Wages increase with age until a certain point in life, at which point they start to fall.

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75

In this model, we have estimated the calculation basis for each worker with a work-related illness, taking the variables mentioned above into account. Duration of the absence from work -DB We have no information on the duration of the absence from work for each type of work-related illness in 2006, but we do have information for 2007. Furthermore, the codes used to identify work-related illnesses in 2006 changed with the entry into force of the new list and coding of work-related illnesses 1 January 2007. To resolve this problem, we converted the 2007 codes to those for 2006. We were thereby able to calculate average durations per type of illness for 2006.

Illness Average duration Work-related illnesses caused by lead. Work-related illnesses caused by mercury. Work-related illnesses caused by chromium. Work-related illnesses caused by nickel. Skin complaints caused by substances not included in other sections. Pneumoconiosis. Asbestosis. Bronchopulmonary complaints due to fumes or dust from aluminum or its compounds. Asthma caused by substances not included in the other sections. Bronchopulmonary complaints due to dust from heavy metals, talc, etc. Helminthiasis, duodenal ankylostomiasis, strongyloidiasis. Malaria, amoebic dysentery, trypanosomiasis, dengue fever, pappataci fever, relapsing fever, yellow fever, plague, leishmaniosis, frambesia, epidemic typhus and other rickettsiosis. Infectious diseases or parasitical diseases transmitted to humans by animals or by their products and corpses (jobs involving work with human or animal excreta are also included for tetanus). Infectious and parasitical diseases of personnel responsible for prevention, assistance and care for the ill and research. Illnesses caused by ionizing radiation. Cataract caused by radiant energy. Hypoacusis or deafness caused by noise. Osteoarticular and agioneurotic diseases caused by mechanical vibrations. Illnesses of the synovial bursa due to pressure, subcutaneous cellulitis. Illnesses due to fatigue of the tendon sheaths, peritendinous tissues and muscular and tendonous insertions. Injuries to the meniscus in mines and underground work. Paralysis of nerves due to pressure.

33 9 24 23 24 N/A N/A N/A 41 9 N/A N/A 25 35 N/A 23 N/A 33 38 35 24 48

10.2. Estimated duration of absences from work by accident victims with unresolved cases We have no information on the duration for unresolved cases. We estimated the anticipated durations using an algorithm that we present below. Calculation of value ‘H’, an estimate of the days absent from work for accidents without a discharge or death date. Record of discharges and deaths (AiD) Number AiD = A (known value) Working days (days) not worked by these AiD = JA (known value) Average days not worked = MJA = JA/A (known value)

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File of accident reports (CA) (accident records) Number of accident reports = C (known value) Days not worked = JC (unknown value) We hypothesize that JC = C*MJA (estimated value) AiD / CA crossover file Number of CA related to the respective AiD = AC (known value) Working days not worked by CA related to AiD = JAC (with) Unrelated reports = CnR CnR = C – AC (known value) Calculation of value H H = (JC-JAC)/CnR We allocate the value H to days not worked due to the accident to all records and unrelated with the discharge or death. 10.3. Calculation of costs associated with maintenance of production 10.3.1. Costs associated with maintenance of production assumed by the employer 10.3.1.1. Overtime payments (PH) We assume that the absences from work of accident victims and those suffering from serious illnesses are covered by overtime hours worked by workers working for the same employer. We also assume that the absences of accident victims and those with serious and very serious illnesses are covered by the recruitment of a new worker. There are two variables that indicate the seriousness of the accident suffered by the victim. The first is the seriousness recorded in the accident report (ex ante) which is the assessment of the doctor treating the emergency. However, we have another assessment of seriousness included in the record of discharges and deaths (ex post) which is the assessment by the doctor discharging the patient or signing the death certificate. We generate a third variable for this study - real seriousness - in which we consider the seriousness ex post for the 164,727 closed files, and seriousness ex ante for the 23,375 files that remain open. We only have the information from the report on work-related illnesses for individuals with work-related illnesses. As mentioned above, we only consider that cases in which the absent worker has a really minor illness incur costs due to extraordinary payments. PH = SMD * DB * (CA/100) SMD = average daily wage. DB = duration of absence from work CA = additional compensation

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-SMD The average daily wage has been obtained by adding the calculation basis (without overtime hours) obtained from the monthly basis for social security contributions, to the daily calculation basis associated with the overtime hours, obtained from the annual basis for social security payments. In 2.56% of cases, the monthly basis for social security payments level is at the maximum level. We therefore know that the wage is more than the monthly basis for social security payments in these cases. This estimation could be improved by using a censored regression model, which enables us to calculate an estimated wage for workers with a calculation basis at the maximum level. -CA The additional compensation per work can be calculated using the quotient between the wage per overtime hour and the wage per ordinary hour, based on information from the Quarterly labor costs survey. As a result, for example, for all categories of the CCAE included in the survey, the ordinary wage cost per hour (which includes the cost of overtime hours) for Spain in the fourth quarter of 2006 was 10.57 euros, while the cost per overtime hour was 14.29 euros, i.e. 35.14% more. This correction factor is similar to the one in the studies of Australia and New Zealand (40%). -DB One of the variables in the accident database is the duration of the absence from work. It was possible to calculate this thanks to the crossover of information between the accident reports and the discharge and death reports. Unfortunately, when the database was created, many cases were still unresolved for various reasons. An estimate has been made of the anticipated durations of these cases based on information on the seriousness of the injury, with the total days not worked by the individuals for whom no information is available calculated as the difference between an estimate of the days not worked by all accident victims and the days not worked by those for whom the duration is known, with this difference then divided by the number of cases for which information is not available. This estimation could be improved with a linear regression model that enables us to estimate the days absent from work, taking not only the seriousness into account, but also gender, age, type of injury, whether the worker is foreign or if the event is a traffic accident. 10.3.1.2. Replacement and training costs (CSF) In the same way as we assumed that victims of minor accidents and illnesses were replaced by overtime hours worked by workers in the same company, we now assume that serious and very serious accident and illness victims do not return to their old jobs. In these cases, as with fatal accidents, the cost of bringing forward the recruitment of a new worker must be taken into consideration. In the case of Australia and New Zealand, this cost is calculated in terms of days of wages. In the Catalan case, we consider it is more appropriate to calculate it as a percentage of the gross annual wage. We therefore redefine the formula:

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CSF = (SBA*PCB) - ((SBA*PCB)/(1+d)0.5 * DLLT) SBA = gross annual wage PCB = percentage of gross annual wage considered in the search cost. d = discount rate DLLT = period spent by a worker in the same job -SBA The gross annual wage is estimated as the average daily wage (SMD) multiplied by 365. - PCB The search cost is defined based on a percentage of the gross annual wage. According to personnel recruitment sources consulted, these percentages vary depending on the profile of the job to be covered. We consider the cost of a human resources consultant to search for an employee is equivalent to 20% of the gross annual wage. -d The discount rate considered is 3.44%, the Euribor average rate in 2006. -DLLT We used a turnover rate similar to that in Australia and New Zealand, with an average of seven years. This estimate could be improved by including a valuation of the time that the new employee takes to adapt to his/her new job. 10.3.1.3. Employer excess payment (PAE) These are the payments that the employer must make when the accident occurs and when the social welfare benefits begin to be received. In Spain, the worker is covered by temporary disability benefit from the day after the accident. In other words, unlike in Australia and New Zealand, the employer does not have to bear any cost in terms of wages between the day of the accident and the beginning of the benefit. All that can be said is that on the day the accident occurs, some hours are lost and the employer must bear this cost. We therefore redefine the equation as follows: PAE =SOMH*(8-HA) PAE = additional payments by the employer SOMH = ordinary average hourly wage HA = the time at which the accident took place - SOMH

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We calculate a measure of wages per hour, and assume that the calculation basis (without overtime hours) is an estimate of the daily wage. We assume that the average working day is eight hours long and determine the calculation basis based on eight hours, and obtain an estimated hourly wage. - HA In the accidents database, there is a variable that shows at what time in the working day the accident took place. We found 1,590 records for 2006 without this information, and for these we assume that they took place halfway through the working day, after four hours. There were 3,997 cases in 2006 in which the accident took place after the ninth hour of the working day. Some professions have working days longer than eight hours. As we have no information on this duration, we assume that the accident happened in the eighth hour. We have not taken the employer excess payments into account when calculating the costs of work-related illnesses. 10.3.1.4. Additional payments by the employer to the Social Security (SS) In Spain, the employer makes Social Security contributions for the following: - Non-work-related accidents or illnesses. This contribution covers situations arising from non-work-related accidents and illnesses and maternity. The standard rate is 23.6%, which is applied to the calculation basis without any overtime hours. - Work-related accidents or illnesses. This contribution covers situations arising from work-related accidents or illnesses. They are applied to the calculation basis taking overtime hours into consideration. The objective of these contributions is to cover temporary disability benefit and benefits for permanent disability, death and survival. The rate varies depending on the employer's activity, although there are some rates applicable to exceptional situations, such as when a worker is on leave. In this case, the contributions for work-related accidents or illnesses must continue to be made, albeit at a reduced rate of 1.1%52. -Overtime. This is to increase the resources of the Social Security. A flat rate of 23.6% is paid, and they are also part of the calculation basis for payment for work-related accidents or illnesses. The social security contributions include those for: * Unemployment (5.5%) * Salary Guarantee Fund (0.2%) * Professional Training (0.6%) 52 According to “the list of premiums for social security contributions for work-related accidents or illnesses”. www.seg- social.es

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The extraordinary payments made by the employer to the Social Security depend on how the accident victim or ill worker is replaced. Overtime As mentioned above, we assume that non-serious absences are substituted by overtime hours. When the absence from work is covered with overtime hours, the employer must pay the Social Security contributions for these overtime hours as well as paying the Social Security contributions of the accident victim or ill worker (with a small reduction in the contribution rate due to absence from work). We begin the calculation by considering the saving involved in having to pay a lower rate for work-related accidents or illnesses due to the worker's absence. We calculate the difference between the rate that should have been paid according to their CCAE group and 1.1%, which is the rate paid by workers absent from work53. SS_estalvi=SMD*DB*(tipo_CCAE-0.011) We include the amount that the employer must contribute to the Social Security in the overtime hours arranged by the employer (already calculated in the section of overtime payments (PH)). SSHE=PH*TCHE The contribution rate for overtime hours, which is 23.6% for non-work-related accidents or illnesses. These overtime hours are also included when calculating the calculation basis for work-related accidents or illnesses. The contributions are consequently made based on the rate for the group to which they belong. -PH (PH=SMD*DB*(CA/100) Payments for overtime hours, calculated as the absent worker's wage plus 35.14% for the amount of days that the absence from work lasts. The extra Social Security cost of overtime hours is therefore that contributed for overtime hours, less the savings generated by contributing at a lower rate for work-related accidents and illnesses for the worker on sick leave. SSHEN=SSCHE- SS_estalvi New worker As mentioned above, we assume that serious and very serious absences are covered by the recruitment of a new worker. When the absence from work is covered by the recruitment of a new worker, the employer must make two social security payments: one for the worker on sick leave and 53 According to “the list of premiums for social security contributions for work-related accidents or illnesses”. www.seg- social.es

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one for his/her replacement. As that of the worker on leave was already being paid, we consider that the Social Security contributions for the new worker will generate an extra cost to the employer. We assume that the replacement is recruited for a wage that is identical to that of the accident victim (including overtime). Contributions must be made for the ordinary daily wage (without overtime hours) (SOMD) for non-work-related accidents (23.6%), work-related accidents or illnesses (rate according to CCAE group), unemployment (5.5%) social guarantee funds (0.2%) and professional training (0.6%). SSREA= SOMD*DB*(0.3015+tipo_CCAE) Contributions must be made for overtime hours worked for non-work-related accidents or illnesses (23.6%) and work-related accidents or illnesses (rate according to CCAE group). SSREB= HE*DB*(0.236+tipo_CCAE) In these cases, we must also consider the savings involved in paying a lower rate for work-related accidents or illnesses for the worker on leave. SS_estalvi=SMD*DB*(tipo_CCAE-0.011) In conclusion, the extra Social Security costs arising from recruiting a replacement will be the contributions made due to the recruitment of the replacement, minus the savings generated by the lower rate for work-related accidents or illnesses for the worker on leave. SSRE= SSREA + SSREB - SS_estalvi It can be concluded that the cost of maintenance of production borne by the employer is: CMPE= PE + CSF + PAE + SS 10.3.2. Costs associated with the maintenance of production borne by society

• Temporary disability benefit As mentioned above, the Spanish national Social Security Institute and mutual insurance company for work-related accidents and illnesses would pay the worker a benefit equivalent to 75% of his/her calculation basis (taking overtime hours into consideration) to compensate for wages lost due to the accident. SIT=SMD*0.75*DB

• Unpaid taxes (IMPP)

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The taxes not received as a consequence of the accident must be calculated. For the calculation, we use the average rate of income tax (TIRPF) for 2004, which is 15.59% We apply this rate to the difference between the ordinary wage and the benefit received. IMPP = (TIRPF/100) * (SMD * DB – SIT) TIRPF= 15.59% Finally, the cost of maintenance of production to society is the total of what has to be paid as temporary disability benefit and the taxes that are not collected as a consequence of the reduction in the worker's income. CMPS=SIT +IMPP 10.3.3. Costs associated with maintenance of production incurred by the worker The production maintenance costs borne by the worker are calculated as the difference between what the worker earned before the accident and what he/she receives as benefits, taking into account that he/she pays fewer taxes. CMPT= (SMD*DB)-(SIT+PAE-IMPP) 10.4. Loss of long-term income 10.4.1. Loss of long-term income by the worker The loss of long-term income covers the long-term costs borne by the worker. It is calculated as the loss of potential output after the re-establishment of the production levels prior to the work-related accident or illness. We were unable to find information to calculate the loss of long-term income in the case of work-related illnesses. We therefore only calculate this for cases of work-related accidents. Unfortunately, we were unable to use the information on records of discharges and deaths. This data source has no precise information on the results of the proposals for permanent disability. The most we can ascertain is whether the worker was recorded due to applying for one of these benefits. We have no information on whether this application was accepted, or on which of the four rates of permanent disability apply to him/her. For this reason, we calculate the human capital costs based on the aggregated information for Catalonia as a whole. We use the chart given to us by the National Social Security Institute, containing information on records of applications for permanent disability presented in Catalonia in 2005, 2006 and 2007. Statistical data of permanent disability benefit arising from work-related accidents. There are four levels of permanent disability: - Partial permanent disability for the normal profession - Total permanent disability for the normal profession

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- Total permanent disability for all work - Serious disability - Partial permanent disability for the normal profession Permanent disability is a disability which without being total, entails a reduction of at least than 33% in the worker's output for this profession, without preventing basic tasks from being undertaken. The benefit consists of compensation which takes the form of a single payment of 24 monthly sums of the calculation basis used to calculate the temporary disability benefit from which the permanent disability arises. - Total permanent disability for the normal profession The worker is deemed to be disabled from the perspective of carrying out all the tasks or the basic tasks of his/her profession, providing that he/she can work in another area. The compensation is 55% of the calculation basis. This percentage could increase by 20% for those aged over 55 years old when they are assumed to have difficulties in obtaining a job other than their normal occupation, due to their lack of general training and the social and employment conditions in their place of residence. - Total permanent disability for all work The worker is deemed to be unable to work in any profession or trade. The compensation is 100% of the calculation basis. - Serious disability In this situation, the worker affected requires the assistance of another person for basic life tasks, such as getting dressed, moving around, eating and similar, as a consequence of anatomical or functional losses. The compensation is 100% of the calculation basis, and this is increased by 50% for payments to people caring for the person with a serious disability. However, we know that the records for each year do not only cover the accidents that have taken place in that year, but also the accidents in previous years for which the temporary disability period has expired. For example, we know that only some of the open files for 2006 deal with accidents occurring in 2006. When the database was created, many of the accident victims in 2006 eligible to apply for a permanent disability benefit could have been within their temporary disability period. These cases were able to apply for permanent disability benefit in 2007 or even in 2008. Taking into account that the number of cases presented has been very similar in the last three years, we calculated the average figure for the last three years and added it as an approximation of the amount of workers receiving each type of benefit.

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2005 2006 2007 Average Estimated

benefits Closed cases 1.521 1.463 1.566 100,00% 1.517 Cases accepted 947 932 1.014 63,57% 964 Cases accepted S.D. 27 38 32 2,14% 32 Cases accepted A.P.D. 51 58 69 3,91% 59 Cases accepted T.P.D. + 20%

181 170 208 12,27% 186

Cases accepted T.P.D. 444 436 475 29,78% 542 Cases accepted P.P.D. 244 230 230 15,48% 235 Cases rejected 208 209 217 13,94% 211 Cases cancelled 366 322 335 22,49% 341 Source: INSS Using the information from the accident record database, we have calculated the average calculation basis and the average days contributed to obtain an approximate monthly and annual wage (average monthly and yearly calculation basis respectively). We only used the information for the serious and very serious cases, which will certainly be more likely to need a permanent disability allowance. To calculate the loss of long-term income, we subtract the current value of what the worker would have earned if the accident had not taken place from the current value of the estimate of the worker’s income after the accident. Calculation basis 2006 2007 SMD (average calculation basis) 52,14 55,04 Average days contributing 28,25 28,95 Average monthly calculation basis 1.472,67 1.593,18 IAI (average annual calculation basis)

19.029,81 20.090,13

Source: database. Average of serious and very serious basis PILP = VPIAI – VPIDI EJ – EPI VPIAI = Σ IAI i = l (1 + d)i EJ – EPI VPIDI = Σ IDI i = l (1 + d)i d = discount rate: 1.146% (calculated as the average weighted rate of 30-year securities54 after discounting the average annual inflation rate of the last 5 years55). EJ= average retirement age: 63.156 EPI = average age when the benefit is first paid: 40 (it would be ideal to be able to use the average age of workers who receive permanent disability benefit. As we do not have this data, we have calculated the average age for victims of serious and very serious

54 Bank of Spain 55 National Statistics Institute 56 Antón Pérez, J. I., Braña Pinto J. and Muñoz de Bustillo Llorente R. 2007), "Effective retirement age in in Spain: An analysis based on the exploitation of the Continuous Sample of Work Lives of the Social Security”, Department of Applied Economics. University of Salamanca.

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accidents, which is 39 years old, and have assumed that all those receiving disability benefit spend a year receiving temporary disability benefit). Income before the accident IAI = 365*SMD. Annual income before the accident. SMD = average daily wage. Income after the accident IDI=(1-k)*IAI. Annual income after the accident. k= Proportion of the worker's pre-accident income lost after partially returning to their old job or to a different job. Based on the studies by Reville and Peterson, we use a rate of 40%. Calculations IAI = a worker's income before the accident (annual base) = 19,030 € VP(IAI) = current value of a worker's income before the accident (annual base) = 389,119 € IDI = worker’s income after the accident. IAI*(1-k) =11.418€ VP(IDI) = current value of a worker's income after the accident (annual base) = 233,471 € Type of disability IAI IDI VP (IAI) VP (IDI) CCH No. of

beneficiaries Total

Cases accepted S.D. 19.030€ 0€ 389.119€ 0€ 389.119€ 32 12.621.588€ Cases accepted A.P.D.

19.030€ 0€ 389.119€ 0€ 389.119€ 59 23.062.909€

Cases accepted T.P.D. + 20%

19.030€ 0€ 389.119€ 0€ 389.119€ 186 72.397.920€

Cases accepted T.P.D.

19.030€ 11.418€ 389.119€ 233.471€ 155.648€ 452 70.288.653€

Cases accepted P.P.D.

19.030€ 11.418€ 389.119€ 233.471€ 155.648€ 235 36.551.059€

Deceased workers 19.030€ 0€ 389.119€ 0€ 389.119€ 200 77.823.823€ Total            1164 292.745.951€

We have assumed that individuals receiving pensions for serious disability, total permanent disability and total permanent disability (who have difficulties in obtaining another job) will not have income after the accident. We assume that the beneficiaries of total permanent disability benefit and permanent partial disability benefit are able to generate 60% of the income that they generated before the accident. First, we calculated the long term loss of income for each degree of permanent disability (PILP). Afterwards, we multiplied this value by the amount of workers that we estimate suffer from each degree of disability, and we obtained the estimated long term loss of income borne by each worker.

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10.4.2. Long term loss of income by society 10.4.2.1. Permanent disability benefit We consider permanent disability benefits to be a long-term loss of income that society must assume. This is calculated as follows: EJ – EPI VPPIP = Σ PIP i = l (1 + d)i -PIP The amount to be received varies according to the various types of disabilities. To calculate it, we apply the appropriate percentages for each type of benefit to the annual average calculation basis (19,182 euros).

Type of disability % Monthly PIP Annual PIP No. of beneficiaries Cases accepted S.D. 150% 2.390 30.135 32 Cases accepted A.P.D. 100% 1.593 20.090 59 Cases accepted T.P.D. + 20% 75% 1.195 15.068 186 Cases accepted T.P.D. 55% 876 11.050 452 Cases accepted P.P.D. 24 months 38.236 38.236 235 PIP: amount receivable for the various types of disability Using same parameters as defined in the previous point, we calculate the current value of the temporary disability benefits that the worker will receive between the estimated date of the accident and he/she reaching retirement age.

Type of disability PIP (annual)

VP (PIP) No. of beneficiaries

Total

Cases accepted S.D. 30.135 616.201€ 32 19.987.275€ Cases accepted A.P.D. 20.090 410.800€ 59 24.347.950€ Cases accepted T.P.D. + 20% 15.068 308.100€ 186 57.323.893€ Cases accepted T.P.D. 11.050 225.940€ 452 102.031.964€ Cases accepted P.P.D. 38.236 38.236€ 235 8.979.113€       964 212.670.195€

10.4.2.2. Taxes not collected (IMPLT) Some taxes cease to be paid as a consequence of the change in the income of the worker involved in the accident. IMPLT = (TIRPF) * (PILP – VPPIP) IMPATT = taxes no longer paid as a consequence of the lower income earned by the worker involved in the accident. IRPF = average or real income tax rate = 15.59% PILP = long term loss of income VPIPI = current value of the amount received according to the various levels of disability.

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Type of disability CCH VP

(PIP) % tax. CCH

% tax. VP (IPI)

Difference No. of beneficiaries

IMPLT

Cases accepted S.D. 389.119€ 616.201€ 58.368€ Exempt 58.368€ 32 1.893.238€ Cases accepted A.P.D.

389.119€ 410.800€ 58.368€ Exempt 58.368€ 59 3.459.436€

Cases accepted T.P.D. + 20%

389.119€ 308.100€ 58.368€ 46.215€ 12.153€ 186 2.261.104€

Cases accepted T.P.D. 155.648€ 225.940€ 23.347€ 33.891€ -10.544€ 452 -4.761.497€ Cases accepted P.P.D. 155.648€ 38.236€ 23.347€ 5.735€ 17.612€ 235 4.135.792€ Deceased workers 389.119€ 0€ 58.368€ 0€ 58.368€ 200 18.661.647€ Serious disability and total permanent disability benefits are exempt from income tax, meaning that 15.59% of the income generated by individuals receiving this benefit is lost. We assume that individuals receiving permanent total disability benefit and permanent partial disability benefit will earn 60% of their previous wage, and therefore will pay fewer taxes. Despite this, they will also pay tax on the income received as permanent disability benefit. In the case of total permanent disability, if we assume that the beneficiary returns to the labor market with a wage equivalent to 60% of his/her calculation basis and receives a benefit of 55%, he/she will end up with a real income that is higher than his/her pre-accident income and will have to pay higher taxes. 10.5. Healthcare costs 10.5.1. Healthcare costs associated with work-related accidents In Spain, mutual insurance companies for work-related accidents and illnesses cover 100% of medical and rehabilitation costs arising from work-related accidents. n

CMRS = Σ TLES * CTLES 1 TLES : type of injury CTLES : cost of each type of injury -CTLES We have calculated the healthcare costs based on a cost structure grouped by diagnostic groups provided by a Spanish mutual insurance company for work-related accidents and illnesses. Costs have been estimated for 28 diagnostic groups.

Description OPHTALMOLOPHY PROCESSES THORACIC PROCESSES CARDIOVASCULAR PROCESSES OTHORHINOLARYNGOLOGY GENERAL SURGERY

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MAXILLOFACIAL SURGERY PROFESSIONAL DISEASES ARTHROSCOPY NEUROSURGERY SLIGHT SPINE PROCESSES COMPLEX SPINE PROCESSES COMPLEX TENDINOUS PROCESSES ENTHESITIS AND THENDINITIS FINGER’S FRACTURES AND LUXATIONS SCAPULAR WAIST’S FRACTURES AND LUXATIONS ELBOW AND FOREARM’S FRACTURES AND LUXATIONS WRIST AND HAND’S FRACTURES AND LUXATIONS PELVIS AND HIP’S FRACTURES AND LUXATIONS KNEE AND LEG’S FRACTURES AND LUXATIONS ANKLE AND FOOT’S FRACTURES AND LUXATIONS BURNS SPRAINS AND TWISTINGS SUPERFICIAL INJURIES COMPLEX INJURIES AMPUTATIONS CONTUSIONS HUMAN MUSCULOSKELETAL SYSTEM’S INFECTIONS VARIOUS UNSPECIFICS

Using the information of reports of discharges and deaths, we were able to ascertain the type of diagnosis to which the closed cases belonged. To calculate the value of healthcare costs, we simply allocate the average cost per type of diagnosis to each observation. We have no records of discharges or deaths for the open cases, and we therefore have no information on the type of diagnosis. We therefore calculated a value for each combination of type of injury and part of the body injured. We explain the calculation made using an example: type of injury - dislocation and part of the body injured - upper limb. We start by analyzing the distribution of the closed cases by type of injury and part of the body injured.

For 2006, we have 17,176 closed cases with dislocation as the type of injury and an upper limb as the injured part of the body. We study how these 17,176 cases are

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distributed in the 28 diagnosis groups for which we have information on healthcare costs.

34.96% are in the sprains and strains diagnostic group, 20.89% are complex tendon injuries, 17.45% are bruises and the remaining 25 make up the hundred percent. In order to calculate the average healthcare cost of dislocations of the upper limb, we multiply these percentages by the medical cost of each diagnostic group. We take the total of each of these multiplications as the average cost for dislocations of the upper limb. We repeat this process for each combination of type of injury and part of the body injured, and by doing so we obtain an indicator of healthcare for the files that remain open. To calculate the healthcare costs for 2007, we updated the costs for the type of injury calculated for 2006 for inflation. 10.5.2. Healthcare costs associated with work-related illnesses

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Unfortunately, we have no reliable information to calculate the healthcare costs of work-related illnesses. We looked for an equivalency between work-related illnesses and the work-related accidents diagnostic group.

Illness

Duradaprom

Work-related illnesses caused by lead. Work-related illnesses caused by mercury. Work-related illnesses caused by chromium. Work-related illnesses caused by nickel. Skin complaints caused by substances not included in other sections. Pneumoconiosis. Asbestosis. Bronchopulmonary complaints due to fumes or dust from aluminum or its compounds. Asthma caused by substances not included in the other sections. Bronchopulmonary complaints due to dust from heavy metals, talc, etc. Helminthiasis, duodenal ankylostomiasis, strongyloidiasis. Malaria, amoebic dysentery, trypanosomiasis, dengue fever, pappataci fever, relapsing fever, yellow fever, plague, leishmaniosis, frambesia, epidemic typhus and other rickettsiosis. Infectious diseases or parasitical diseases transmitted to humans by animals or by their products and corpses (jobs involving work with human or animal excreta will also be included for tetanus. Infectious and parasitical diseases of personnel responsible for prevention, assistance and care for the ill and research. Illnesses caused by ionizing radiation. Cataract caused by radiant energy. Hypoacusis or deafness caused by noise. Osteoarticular and agioneurotic diseases caused by mechanical vibrations. Illnesses of the synovial bursa due to pressure, subcutaneous cellulitis. Illnesses due to fatigue of the tendon sheaths, peritendinous tissues and muscular and tendonous insertions. Injuries to the meniscus in mines and underground work. Paralysis of nerves due to pressure.

7 7 7 7 7 7 1 4 8 13 13 8 13

We allocated the average cost to illnesses for which we were unable to associate a type of diagnosis. 10.6. Calculation of pain and suffering costs We make a distinction between two types of situations when calculating pain and suffering costs: that of individuals who return to their normal job after some time, and that of those who cannot return to the job they did before the accident. With complete return to work We assume that people suffering from minor accidents can return to their old job after their period of sick leave is over. As mentioned in chapter 4, in the case of accidents leading to a full return, these costs (CPATP) are the result of multiplying the proportion represented by the days absent from work (DB) within the total for the year by the value of one year of life (VVH) weighted by the appropriate disability index (IDIS). These costs would therefore be calculated as:

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CPATP = (DB/365) * VVH * IDIS -VVH We have estimated the value of a year of life, annualizing the value of a human life. We use the most conservative calculation in the study by Rigués et al (2007): 2,040.000 euros in 2000. We update this figure for inflation in order to be able to express it in 2006 and 2007 euros.

Statistical value of the life Year 2.040.000€ 2000 2.458.200€ 2006 2.562.240€ 2007

Variation in prices according to the basic CPI system, 2006. Source: NSI We annualize the value of human life using a discount rate of 1.146% on an average of 45 years of anticipated life (the difference between the (average) age of the accident victim and life expectancy. The results are presented in the table below.

VEV in annual terms 2007 2006

73.195,19€ 69.055,16€ The discount rate (1.146%) was calculated based on the medium-term interest rate for 30-year securities between 2003 and 2007, net of inflation.

30-year securities Weighted average rate 2003 4,9 2004 4,73 2005 3,84 2006 4,04 2007 4,62

Total 4,426 Source: Bank of Spain.

Average inflation Long term interest rate net of inflation 3,28 1,146

Source: NSI The life expectancy figure (81 years) is taken from the World Health Organization report for 2006. We obtained the (average) age of the accident victim from the accident reports (37 years old in 2006 and 36 years old in 2007). -IDIS

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To assess the extent to which the injuries affected the life of accident victims, we assume that they are equivalent to a certain proportion of a year of life. Zero is equivalent to a perfect state of health and one is equivalent to death. We use the disability weighting index in an Australian study by Mathers et al, which combines the weights of illnesses assessed by the Global Burden of Disease Study with 53 new illnesses, evaluated by a Dutch study. This includes new categories that are important to public health in European countries, but with a methodology that is consistent with the World Health Organization study on the Global Burden of Disease. We adapt this index to the structure of the database of this study. The equivalencies are performed taking the type of injury into account, and in some cases the part of the body injuries was also taken into consideration. The criteria adopted are shown in detail in the tables below. The first column shows the information on the injury shown in the accident report, and the second shows its equivalent in the Australian study. The third column shows the weight of the type of injury in each case. The fourth column shows the source from which the data is taken (this could be the Global Burden of Disease study, the Dutch study or an average that we have calculated based on the information available).

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Description of the accident report Description of the Australia study

Weight Source

Superficial wounds and injuries Superficial injuries Open wounds Other types of superficial wounds and lesions

Open wounds 0,108 GBD pes

Bone fractures Closed fractures Open fractures Other types of bone fractures

Fractures Various weights according to the part of the body injured (see table 2)

Dislocations and subdislocations Dislocations 0,074 GBD pes Sprains and strains Sprains 0,064 GBD pes Dislocations, sprains and strains Other types of dislocations, sprains and strains

Other types of dislocations and sprains

0,069 Average for dislocations and sprains

Traumatic amputations (loss of body parts) Amputations Various weights according to the part of the body injured (see table 2)

Concussion and internal injuries Concussion and intracranial injuries Internal injuries Other types of concussion and internal injuries

Internal injuries 0,208 GBD pes

Burns, scalding and freezing Burns and scalding (heat) Chemical burns (corrosion) Freezing Other types of burns, scalding and freezing

Burns 0,346 Average of three injury levels depending on percentage of body burnt GBD pes

Poisonings and infections Acute poisonings Acute infections Other types of poisonings and infections

Poisonings 0,608 GBD pes

Suffocation and asphyxia Asphyxia Suffocation and non-fatal submersions Other types of suffocation and asphyxia

Suffocation and asphyxia

0,211 Average using all the injuries scale

Effects of noise, vibration and pressure Acute hearing loss Effects of pressure (barotrauma) Other effects of noise, vibration and pressure

Hearing loss 0,12 Dutch pes

Effects of extreme temperatures, light and radiation Heat and sunstroke Effects of non-thermal radiation Effects of low temperatures Other effects of extreme temperatures, light and radiation

Natural and environmental factors

0,158 Average using all the injuries scale

Psychological trauma, traumatic shock Psychological trauma as a consequence of assault or threats Traumatic shock (electric, caused by lightning, etc.) Other types of shock (natural disasters, anaphylactic shock, etc.)

Post-traumatic disorder

0,158 Dutch pes

Multiple injuries Heart attacks, brain hemorrhages and other non-traumatic pathologies Other injuries specified and not included in other sections

Cardiac arrest 0,353 Dutch pes

In the case of fractures and amputations, we have also taken into account the part of the body injured.

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Type of injury Part of the body injured Weight Source

Fractures Cranium Bones of the face Spinal column Rib or sternum Pelvis Clavicle, scapula or humerus Radio Bones of the hands Femur Kneecap or tibia Ankle Bones of the feet Not specified / multiple parts

GBD pes GBD pes GBD pes GBD pes GBD pes GBD pes GBD pes GBD pes GBD pes GBD pes GBD pes GBD pes Average

Amputations Arm Finger Leg Foot Toe Lower limbs Not specified / multiple parts

GBD pes Average between thumb and the other fingers GBD pes GBD pes GBD pes Average between the foot, leg and toe General average

The entire body, many parts or not specified

General average

Deaths are considered to have a loss equal to 1

With no full return to work We assume that in the case of serious and very serious accidents and death, the individuals concerned are unable to return to their previous job. In the case of accidents not leading to a full return, the calculation of these costs (CPATnoP) would be: EV - EA CPATnoP = Σ VVH * IDIS i = l (l + d)i -EV The life expectancy figure of 81 years is taken from the World Health Organization reports for 2006. -EA The age at which the accident occurs is taken from the accident reports. -VVH Value of one year of life. -IDIS Disability index. -d Long term interest rate.

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We calculate the value of the total cost of pain and suffering between the age at which the accident took place and the expected age of death. Finally, we add the pain and suffering costs of those who return to their previous job and those who do not. CPAT = CPATP + CPATnoP Finally, we must discount the part borne by the worker in other categories to avoid double accounting. This is equivalent to the worker's loss of income in the short- and long-term. CPAT*=CPAT-CMPT-PILPT