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The two Moeller electronics factories that straddle the Czech-Austrian border are virtually identical. Only 20 km apart, they employ the same number of people — about 1,100 each — and make the same components. But there is one striking difference: employees in the Czech factory in the town of Suchdol nad Luznuci spend more than twice as much time off sick as their Austrian counterparts in nearby Schrems. Is there something in the water?

No. The problem is not health or the environment, according to Pavel Mracek, the Czech plant's personnel director. The problem is the government's absenteeism policy. At present, a typical worker at the Czech plant earns about €370 a month — but if he calls in ill, he'll get €325 in benefits from the government over the same period. Not surprisingly, absenteeism in the Czech Republic has soared almost 20% since the policy was adopted in 1999. Today, 710 out of every 10,000 workers are absent due to illness on any given workday. Says Mracek: "It pays to be sick."

Across Europe, vast numbers of citizens are failing to turn up for work, sometimes for months at a time. It's expensive — absenteeism sucked €17.2 billion from the British economy in 2001, with a total of 176 million days taken off work, mainly for illness. That works out at about €695 per employee — up from €633 the previous year. Not every European nation is so afflicted; in parts of Europe, absentee rates are falling. But all told, absenteeism costs Europe tens of billions of euros annually.

In many nations, employers cover the bulk of initial sick-pay costs, and then governments step in and pick up the tab. And as the economic crunch continues, both governments and corporations are watching their employees' health as carefully as their fiscal health — and trying to get staff to work at full capacity. But grand initiatives to boost attendance have run aground due to everything from union pressure to slack doctors to sneaky employers. In the Czech Republic, for example, it's not just the workers that abuse the system. Since the government picks up the sick-pay tab, some employers put workers on sick leave during seasonal drops in demand. As Jiri Hofman, deputy minister of labor and social affairs, told Time: "Some companies suddenly report that almost 100% of their workers are sick. It's as if they've been hit by plague."

Between August 2000 and August 2001, Germany's Betriebskrankenkasse des Landes Berlin (bkk) — a state health-insurance scheme — made unannounced home visits to workers in Berlin who had been off sick at least five times in the previous year, claiming minor ailments. Of the 65,000 people they visited, 53% were diagnosed as being fit for work. Says François de Closets, author of several books on anti-competitive attitudes in France: "There are people who take a day more or less unjustifiably and suddenly, well, another to have a long weekend."

Of course, some workers are more likely to be absent than others, often for legitimate reasons — for starters, women. Absenteeism is "the only indicator where females perform worse" than males, says Andrea Ichino, an economics professor at the European University in Florence, citing women's health issues and family commitments as possible reasons. And statistics reveal that manual workers are more likely to be absent from work than their white-collar counterparts, thanks to injurious working conditions and lack of economic incentives.

Unfortunately, some strategies to verify illness have made the absenteeism issue more opaque. In Belgium, citizens who want to take time off sick present employers with an easy-to-obtain medical certificate which specifies how long they will be off work. As a result, the language of absenteeism is intrinsically bureaucratic: when one American working in Brussels asked after the health of a stricken secretary, he was told, "She has a certificate for three days." And not everybody considers a doctor's say-so reliable. In Berlin, says bkk spokesman Horst Engelhardt, "Doctors want to keep their patients. I bet you that if you go to three doctors, one of them will give you a medical certificate even if you are not ill." To head off this problem, Italian law says that doctors who make follow-up checks on sick workers must be selected by a social security institution — not by the employer or employee concerned.

Progress in combatting absenteeism has been erratic in much of Europe, where unions are powerful and the welfare state persists. In the Netherlands during the 1990s, the Dutch government shifted the bulk of the responsibility for the first year of a worker's sick pay from its own coffers to those of employers. Dutch companies, went the thinking, would thus police their workers' absences more carefully. It seems to have worked: one study by the Labor Force Survey shows absenteeism in the Netherlands fell about one-third between 2000 and 2002.

Elsewhere, however, things have not changed. In Germany, employers pay the first six weeks of illness benefits — a responsibility that cost them €33 billion last year. In 1996, the then Christian Democratic government lowered benefits from 100% to 80% of a worker's salary, triggering outrage among unions. In 1999, the red-green coalition under Chancellor Gerhard Schröder reversed the decision, in order to fulfill an election-campaign promise.

And European governments are also hampered by their policies toward long-term illness. At present, some 37 million Europeans are officially listed as disabled. Definitions vary, but in the U.K., a person who is still ill after receiving full occupational or statutory sick pay — a benefit that, in the case of the government scheme, lasts for 28 weeks — is then reclassified from being "in employment" to receiving Incapacity Benefit. That benefit costs the U.K. government some €3.6 billion a year more than unemployment benefit. And the longer you're on Incapacity Benefit, the higher the payout becomes. Says Clare Hinkley, policy adviser to the Human Resources Directorate at the Confederation of British Industry: "There is some suspicion ... that this acts as an incentive for people to go onto Incapacity Benefit and not get off."

Just as some businesses benefit from creating false sick workers, so, too, do some European governments use disability rolls to disguise unemployment numbers. In the past 15 years or so, U.K. unemployment has fallen by about 1 million. In the same time period, however, expenditure on Incapacity Benefit has more than doubled to €9.5 billion, and now, about 7.5% of the working population receive such benefits.

Other countries have the same issues. At the end of 1999, about 200,000 people were officially unemployed in the Netherlands. But according to a recent o.e.c.d. report, almost five times as many were receiving disability benefits. And "that's the end of the story," Stefan Tromel, director of the European Disability Forum, told the Financial Times.

Other methods have been devised to address the problem in the short term — like attendance bonuses. At the Moeller plant in the Czech Republic, such bonuses have succeeded in reducing absenteeism even as the situation in the rest of the country deteriorates. But the idea leaves some observers incredulous. Says France's De Closets: "A reward for simply coming in and doing the job?"

There's always the simplest motivator for people to turn up: the prospect of no job at all. As the economic downturn lingers on, some European authorities are reporting declines in absenteeism. "When people are worried they may lose their jobs," says Wieslaw Lagodzinski, spokesman for the Central Statistical Office in Warsaw, "they have much more respect for work." In Germany, where the 11.1% unemployment rate is at its highest for 10 years, absenteeism is at its lowest level since 1991. A sick economy, it seems, can make for a healthier workforce.

• JENNIE JAMES
• European businesses are sick of absenteeism