The economic impact of diabetes through lost labour force participation on individuals and government: evidence from a microsimulation model

Deborah J. Schofield, Michelle Cunich, Rupendra Shrestha, Megan Passey, Lennert Veerman, Emily J. Callander, Simon Kelly, Robert TANTON

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    Abstract

    Diabetes is a costly and debilitating disease. The aim of the study is to quantify the individual and national costs of diabetes resulting from people retiring early because of this disease, including lost income; lost income taxation, increased government welfare payments; and reductions in GDP. Methods A purpose-built microsimulation model, HealthWealthMOD2030, was used to estimate the economic costs of early retirement due to diabetes. The study included all Australians aged 45?64 years in 2010 based on Australian Bureau of Statistics? Surveys of Disability, Ageing and Carers. A multiple regression model was used to identify significant differences in income, government welfare payments and taxation liabilities between people out of the labour force because of their diabetes and those employed full time with no chronic health condition. Results The median annual income of people who retired early because of their diabetes was significantly lower (AU$11 784) compared to those employed full time without a chronic health condition who received almost five times more income. At the national level, there was a loss of AU$384 million in individual earnings by those with diabetes, an extra AU$4 million spent in government welfare payments, a loss of AU$56 million in taxation revenue, and a loss of AU$1 324 million in GDP in 2010: all attributable to diabetes through its impact on labour force participation. Sensitivity analysis was used to assess the impact of different diabetes prevalence rates on estimates of lost income, lost income taxation, increased government welfare payments, and reduced GDP. Conclusions Individuals bear the cost of lost income in addition to the burden of the disease. The Government endures the impacts of lost productivity and income taxation revenue, as well as spending more in welfare payments. These national costs are in addition to the Government?s direct healthcare costs.
    Original languageEnglish
    Pages (from-to)1-8
    Number of pages8
    JournalBMC Public Health
    Volume14
    Issue number220
    DOIs
    Publication statusPublished - 2014

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    Economics
    Taxes
    Costs and Cost Analysis
    Retirement
    Health
    Health Care Costs
    Caregivers

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    Schofield, Deborah J. ; Cunich, Michelle ; Shrestha, Rupendra ; Passey, Megan ; Veerman, Lennert ; Callander, Emily J. ; Kelly, Simon ; TANTON, Robert. / The economic impact of diabetes through lost labour force participation on individuals and government: evidence from a microsimulation model. In: BMC Public Health. 2014 ; Vol. 14, No. 220. pp. 1-8.
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    abstract = "Diabetes is a costly and debilitating disease. The aim of the study is to quantify the individual and national costs of diabetes resulting from people retiring early because of this disease, including lost income; lost income taxation, increased government welfare payments; and reductions in GDP. Methods A purpose-built microsimulation model, HealthWealthMOD2030, was used to estimate the economic costs of early retirement due to diabetes. The study included all Australians aged 45?64 years in 2010 based on Australian Bureau of Statistics? Surveys of Disability, Ageing and Carers. A multiple regression model was used to identify significant differences in income, government welfare payments and taxation liabilities between people out of the labour force because of their diabetes and those employed full time with no chronic health condition. Results The median annual income of people who retired early because of their diabetes was significantly lower (AU$11 784) compared to those employed full time without a chronic health condition who received almost five times more income. At the national level, there was a loss of AU$384 million in individual earnings by those with diabetes, an extra AU$4 million spent in government welfare payments, a loss of AU$56 million in taxation revenue, and a loss of AU$1 324 million in GDP in 2010: all attributable to diabetes through its impact on labour force participation. Sensitivity analysis was used to assess the impact of different diabetes prevalence rates on estimates of lost income, lost income taxation, increased government welfare payments, and reduced GDP. Conclusions Individuals bear the cost of lost income in addition to the burden of the disease. The Government endures the impacts of lost productivity and income taxation revenue, as well as spending more in welfare payments. These national costs are in addition to the Government?s direct healthcare costs.",
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    The economic impact of diabetes through lost labour force participation on individuals and government: evidence from a microsimulation model. / Schofield, Deborah J.; Cunich, Michelle; Shrestha, Rupendra; Passey, Megan; Veerman, Lennert; Callander, Emily J.; Kelly, Simon; TANTON, Robert.

    In: BMC Public Health, Vol. 14, No. 220, 2014, p. 1-8.

    Research output: Contribution to journalArticle

    TY - JOUR

    T1 - The economic impact of diabetes through lost labour force participation on individuals and government: evidence from a microsimulation model

    AU - Schofield, Deborah J.

    AU - Cunich, Michelle

    AU - Shrestha, Rupendra

    AU - Passey, Megan

    AU - Veerman, Lennert

    AU - Callander, Emily J.

    AU - Kelly, Simon

    AU - TANTON, Robert

    PY - 2014

    Y1 - 2014

    N2 - Diabetes is a costly and debilitating disease. The aim of the study is to quantify the individual and national costs of diabetes resulting from people retiring early because of this disease, including lost income; lost income taxation, increased government welfare payments; and reductions in GDP. Methods A purpose-built microsimulation model, HealthWealthMOD2030, was used to estimate the economic costs of early retirement due to diabetes. The study included all Australians aged 45?64 years in 2010 based on Australian Bureau of Statistics? Surveys of Disability, Ageing and Carers. A multiple regression model was used to identify significant differences in income, government welfare payments and taxation liabilities between people out of the labour force because of their diabetes and those employed full time with no chronic health condition. Results The median annual income of people who retired early because of their diabetes was significantly lower (AU$11 784) compared to those employed full time without a chronic health condition who received almost five times more income. At the national level, there was a loss of AU$384 million in individual earnings by those with diabetes, an extra AU$4 million spent in government welfare payments, a loss of AU$56 million in taxation revenue, and a loss of AU$1 324 million in GDP in 2010: all attributable to diabetes through its impact on labour force participation. Sensitivity analysis was used to assess the impact of different diabetes prevalence rates on estimates of lost income, lost income taxation, increased government welfare payments, and reduced GDP. Conclusions Individuals bear the cost of lost income in addition to the burden of the disease. The Government endures the impacts of lost productivity and income taxation revenue, as well as spending more in welfare payments. These national costs are in addition to the Government?s direct healthcare costs.

    AB - Diabetes is a costly and debilitating disease. The aim of the study is to quantify the individual and national costs of diabetes resulting from people retiring early because of this disease, including lost income; lost income taxation, increased government welfare payments; and reductions in GDP. Methods A purpose-built microsimulation model, HealthWealthMOD2030, was used to estimate the economic costs of early retirement due to diabetes. The study included all Australians aged 45?64 years in 2010 based on Australian Bureau of Statistics? Surveys of Disability, Ageing and Carers. A multiple regression model was used to identify significant differences in income, government welfare payments and taxation liabilities between people out of the labour force because of their diabetes and those employed full time with no chronic health condition. Results The median annual income of people who retired early because of their diabetes was significantly lower (AU$11 784) compared to those employed full time without a chronic health condition who received almost five times more income. At the national level, there was a loss of AU$384 million in individual earnings by those with diabetes, an extra AU$4 million spent in government welfare payments, a loss of AU$56 million in taxation revenue, and a loss of AU$1 324 million in GDP in 2010: all attributable to diabetes through its impact on labour force participation. Sensitivity analysis was used to assess the impact of different diabetes prevalence rates on estimates of lost income, lost income taxation, increased government welfare payments, and reduced GDP. Conclusions Individuals bear the cost of lost income in addition to the burden of the disease. The Government endures the impacts of lost productivity and income taxation revenue, as well as spending more in welfare payments. These national costs are in addition to the Government?s direct healthcare costs.

    KW - Diabetes

    KW - Chronic disease

    KW - Labour force participation

    KW - Economic costs

    KW - Microsimulation modelling

    KW - Income

    KW - Taxation

    KW - Government welfare payments

    KW - GDP

    U2 - 10.1186/1471-2458-14-220

    DO - 10.1186/1471-2458-14-220

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    EP - 8

    JO - BMC Public Health

    JF - BMC Public Health

    SN - 1471-2458

    IS - 220

    ER -