A Cost-Benefit Analysis of Industrial Health Promotion Program in Korea

산업보건사업의 경제성 분석

There has been investments by firms to protect workers' health and to improve their health status. Most of the investments are made on the ground of legal requirement. However many argue that the amount of investments made falls short of the legally required level. One of the reasons why firms are not active in undertaking required investments is that they are not certain whether such investment is economically beneficial to them or not. Using CBA (Cost-Benefit Analysis), this study investigates whether firms' investments on workers' health are economically justifiable or not. All kinds of expected costs and benefits are itemized and calculated, and costs are compared with benefits. The result shows that if firms fully undertake the legally required investments, total expected costs amount to W453.2 billion and expected benefits accruing to reductions from medical care costs, workers compensation costs, litigation costs in case of legal suit, work days lost, and etc. comes up to W2,086.8 billion. In other words, economic benefits from firms' investment on industrial health far outweighs their costs. As the economy grows, the probability of having various occupational disease increases. It is well conceivable from this study outcome that, the higher the probability, the greater the social loss would be, and the greater the benefits from proper investments on workers' health.