Effects of health and education on labour force participation

Education Health Labour force Employment Productivity Australia
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The National Reform Agenda (NRA) proposed in 2006 by the Council of Australian Governments (COAG) includes a human capital stream of reforms, designed to effect changes in health, education and work incentives. In 2006, the Productivity Commission undertook an assessment of the economic and fiscal impacts that NRA might produce by 2030, including impacts flowing from better health and education (Productivity Commission 2006).

The potential economic benefits of better health and education have been the subject of increasing policy interest in recent times in Australia. This interest has largely been motivated by the projected implications of population ageing in terms of lowered labour force participation and output growth. The observation that Australia lags some comparable countries in terms of labour force participation has signalled one possible avenue for alleviating the economic effects of ageing. Also, claims that skill shortages may be limiting growth in some regions and industries have added to the interest in the potential for greater labour force participation to ease some of the economic bottlenecks Australia may encounter. 


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