The Effects of Education and Health on Wages and Productivity – Productivity Commission – released 18 March 2010

Posted on March 18, 2010. Filed under: Workforce | Tags: |

The Effects of Education and Health on Wages and Productivity – Productivity Commission – released 18 March 2010
Staff working paper
This paper by Matthew Forbes, Andrew Barker and Stewart Turner

ISBN 978-1-74037-309-8

Extract from the overview:

“In 2006 the Productivity Commission published a report on the potential benefits of the National Reform Agenda (NRA). The NRA is a program of reforms that were proposed by the Council of Australian Governments (COAG) to address impediments to productivity growth and to achieve higher levels of workforce participation and productivity. In March 2008 COAG announced a ‘COAG Reform Agenda’ that focuses on many of the areas that were part of the NRA, including productivity, education, skills and early childhood (COAG 2008).

The NRA includes a ‘stream’ of reforms to address human capital development. ‘Human capital’ refers to the set of attributes that makes it possible for individuals to work and contribute to production. It encompasses skills, work experience, health and intangible characteristics such as motivation and work ethic. Human capital is a key driver of workforce participation and labour productivity and, at the aggregate level, gross domestic product, consumption and community wellbeing. Measures to maintain and enhance the community’s stock of human capital are likely to increase standards of living.

As part of its report on the potential benefits of the NRA, the Commission was asked to estimate the potential future benefits to the community of increasing education levels and reducing the incidence of chronic illnesses. In particular, the Commission investigated six ‘target’ conditions: heart disease, cancer, diabetes, arthritis, mental illness and serious injury. The Commission’s task included estimating the effects of NRA reforms on labour force participation and labour productivity. To do this, the Commission undertook an extensive review of the literature, drawing from Australian and overseas sources to estimate the effects of education and chronic illness on labour market outcomes. Results from the literature indicated that increasing levels of education and reducing the incidence of illness are associated with higher levels of workforce participation and labour productivity.”

…continues

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