Monday, June 20, 2011

Research: Costs of Illness and Early Retirement of Older Workers in Australia

Australian researchers have published results showing that illness-related early retirement has significant economic impacts on both the individual and on governments as a result of lost income, lost taxation revenue and increased government support payments, and quantifying the extent of these impacts for Australia. According to "Economic impacts of illness in older workers: quantifying the impact of illness on income, tax revenue and government spending"
[P]ersons out of the labour force due to illness had significantly lower incomes ($218 per week as opposed to $1,167 per week for those employed full-time), received significantly higher transfer payments, and paid significantly less tax than those employed full-time or part-time. This results in an annual national loss of income of over $17 billion, an annual national increase of $1.5 billion in spending on government support payments, and an annual loss of $2.1 billion in taxation revenue.
The authors--Deborah J Schofield, Rupendra N Shrestha, Richard Percival, Megan E Passey, Simon J Kelly, and Emily J Callander--conclude that "In the past, policy has focused upon economic incentives to defer retirement. However, as ill health is a primary barrier to workforce participation in older Australians, economic incentives alone may not be able to increase participation if the underlying health conditions are not addressed. Investment in improvements in health is potentially an important way of improving national living standards."

Source: BioMed Central Public Health Volume 11 Abstract (June 1, 2011)

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