Impact of health on the ability of older Australians to stay in the workforce - with possible contributions to economic sustainability

Abstract

The ageing of the population, combined with increasing life expectancies, is raising concerns about the sustainability of current economic and social structures. This paper studies the likelihood and impact of more older Australians staying in the labour force - subject to individuals’ own health, socioeconomic status (SES), sex, age and family characteristics. A dynamic microsimulation model is used to estimate the probability that, in a changed employment environment, more Australians aged 65-70 would work more than 15 hours per week. Under that scenario, the findings are that around 500,000 additional persons aged 65-70 years would remain in the workforce - with the related earnings totalling up to $20 billion in 1998 ($35 billion in 2018). The estimated savings by government on the age pension would be around $2 billion ($4 billion in 2018).