A dangling bond adds an extra energy level between the valence band and conduction band of a lattice. This allows for absorption and emission at longer wavelengths, because electrons can take smaller energy steps by moving to and from this extra level. The energy of the photons absorbed by or emitted from this level is not exactly equal to the energy difference between the bottom of the conduction band and the dangling bond or the top of the valence band and the dangling bond. This is due to lattice relaxation which causes a Franck-Condon shift in the energy. This shift accounts for the difference between a tight-binding calculation of these energy differences and the experimentally measured energies.
Another way in which the presence of dangling bonds affects the optical properties of a material is via polarization. For a material with dangling bonds, the absorption intensity depends on the polarization of the absorbed light. This is an effect of the symmetry in which the dangling bonds are distributed over the surface of the material. The dependence only occurs up to the energy at which an electron can be excited to the level of the gap but not to the valence band. This effect along with the polarization dependence disappearing after the dangling bonds have been annealed, shows that it is an effect of the dangling bonds and not just of the general symmetry of the material.