Objectives There is increasing interest in the economic effects of improving working conditions, however, evidence is sparse. This study aims to estimate the economic effects of hypothetical improvements in the psychosocial work environment (PSWE) experienced by Danish workers.

Methods We included 71 207 workers, reporting information on their psychosocial working conditions in the “Work Environment and Health in Denmark” survey and linked these workers to population-based register data. We used the parametric g-formula method to estimate the economic effects of hypothetical improvements of the general PSWE, in terms of costs related to sickness absence and healthcare use. We further examined which PSWE factors contributed most to the economic effects.

Results A hypothetical improvement of the PSWE – from the least to the most desirable situation – resulted in an annual gain of €1685 [95% confidence interval (CI) €1234–2135] per worker. When analyzing an improvement from the observed to the most desirable situation, the gain became weaker (€305, 95% CI €134–476). Gains were largely driven by reductions in sickness absence and were larger for women than men and for public sector workers than private sector workers. The PSWE factors with the largest contribution were eliminations of threats of violence and improvements in quality of leadership and social support from colleagues (least to most desirable) and improvements in social support from colleagues, influence at work and quality of leadership (observed to most desirable), respectively.

Conclusions Hypothetical improvements in the PSWE resulted in substantial economic gains, mostly driven by savings related to sickness absence.

Key terms cohort study; cost; Denmark; economic gain; healthcare use; occupational health; parametric g-formula; psychosocial work environment; sickness absence; simulation study

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