Healthy older workers boost the economy
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Australia’s employment and real GDP would be higher if older workers managed their health better, according to new research.
Using an economy-wide model, researchers from Monash University looked at the relationship between health and workforce participation in order to analyse the wider effects of chronic disease.
Dr George Verikios of the Centre of Policy Studies said the labour market was the main area of the economy to be affected by the indirect costs of disease as demonstrated by reduced labour productivity and workforce participation.
“By looking at chronic disease and the associated rate of health decline of workers, we found reducing poor health in older workers would have a much greater effect on the Australian economy than similar reductions for younger workers,” Dr Verikios said.
“We found health improvements for 10 per cent of the unhealthiest older workers (those aged 49-60) could have strong effects on the country’s economy.
“We estimate employment could rise by 0.13 per cent and real Gross Domestic Product (GDP) by 0.1 per cent over the period 2011-2030. Similar improvements in health status for younger workers (those aged 29-38) lead to much smaller effects with employment forecast to rise by 0.01 per cent and real GDP by 0.008 per cent.”
Dr Verikios said that with appropriate health programs and interventions in place, the health of older workers would decline more slowly and their workforce participation would also decline more slowly as they aged.
“Days off and withdrawing from the labour force increase production costs for businesses and make it harder to find workers. If there was better health management for older workers these impacts would be reduced,” Dr Verikios said.
“Workforce participation by younger workers is less affected by their health compared with older workers, so there are smaller benefits from improving the health of younger workers.”
"The research also found that companies that face overseas competition such as agriculture and manufacturing would benefit from the increase in labour. This increased benefit would mean improvement in Australia’s trade balance from higher exports relative to imports.”
Dr Verikios said further research linking health status and demands for health treatments would allow researchers to consider the full impact of treatment programs and disease prevention on the Australian economy.