A new approach for estimating the indirect costs of disease, which explicitly considers
economic circumstances that limit production losses due to disease, is presented (the
friction cost method). For the Netherlands the short-term friction costs in 1990 amount
to 1.5-2.5% of net national income (NNI), depending on the extent to which short-term
absence from work induces production loss and costs. The medium-term macro-economic
consequences of absence from work and disability reduce NNI by an additional 0.8%.
These estimates are considerably lower than estimates based on the traditional human
capital approach, but they better reflect the economic impact of illness.