June 2001

IZA DP No. 312: The Value of Pain Relief

Carina Furnée, Marius Kemler, Gerard A. Pfann

published in: De Economist, 2003, 151 (2), 171-192

This paper measures the value of functional capacity improvement from electronic pain treatment among a sample of Dutch workers with peripheral nerve injuries. Randomized clinical trial data and individual medical records from injured workers are compared with administrative data of healthy workers to calibrate the treatment’s net present value of capacity improvement. The value of basic improvement averages 109,000 Dutch 1995 guilders or 25 percent of the total earnings loss without treatment. The value of advanced improvement, when on-the-job learning capacity is recovered, amounts to 150,000 Dutch guilders or 32 percent for workers with university education.