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Chronic disease and labour force participation in Australia: an endogenous multivariate probit analysis of clinical prevalence data


Introduction and background

In July 2006 the Council of Australian Governments (Council of Australian Governments 2006) agreed a framework for a human capital agenda to improve labour force participation and productivity in Australia. They identified reducing the incidence of preventable chronic disease among the working age population as a priority in order to both improve health outcomes and also to reduce the proportion of the working age population not participating and/or under-participating in paid employment due to illness, injury or disability (COAG 2006).

Health status is an important predictor of labour supply and chronic disease is a growing contributor to morbidity related labour market outcomes. Coronary heart disease is the largest single cause of death in Australia (19% of all deaths in 2004) with mortality in Indigenous Australians, 5 times that of other Australians and a significantly higher mortality rate in disadvantaged areas (Australian Institute of Health and Welfare 2006). Diabetes is also a major contributor to deaths in Australia (2.7% directly and associated with a further 6%) with mortality in Indigenous Australians 14 times that of other Australians. Each has a high morbidity cost with over 165,000 hospital separations from coronary heart disease and 66,700 hospital separations from diabetes in 2004. The major risk factors for diabetes and cardiovascular disease are well known – smoking, diet and a lack of physical activity along with genetic predisposition to high blood pressure, cholesterol levels and diabetes.

Commentators have expressed alarm at the rates of overweight and obesity in Australia, with a 2.5 fold increase from 1980 to 1995 before stabilizing for men but continuing to rise for women (Cameron, Welborn et al. 2003). Consequently obesity and physical inactivity have been promoted internationally as the primary focus for diabetes prevention (World Health Organisation, 2003). The risk of cardiovascular disease and diabetes are highly correlated not only because poor diet and inadequate physical activity are risk factors for both, but also because high blood pressure elevated blood fats and abdominal obesity that are common with diabetes are risk factors for heart disease. Diabetes is associated with a two to fourfold increase in the incidence of cardiovascular disease (CVD) and an elevated risk of premature death (Haffner, Lehto et al. 1998; Hu, Stampfer et al. 2001; Manuel and Schultz 2004).

The prevalence of major chronic illnesses including diabetes and cardiovascular disease has been on the rise in the past decade in developed countries. In 1997, 124 million people worldwide had diabetes. and by the year 2010 the total number of people with diabetes is projected to reach 221 million (Amos, McCarty et al. 1997). The number of Australian adults with diabetes has more than doubled since 1981 (Dunstan, Zimmet et al. 2002; Australian Institute of Health and Welfare 2006), and numbers are expected to continue to grow rapidly over the coming decades as the Australian population ages and becomes more overweight and less physically active. Many people go undiagnosed and even those who have been diagnosed often do not manage their diabetes. There have been significant improvements in how doctors manage patients with increasing rates of prescriptions for the treatment of hypertension, heart disease, diabetes and heart failure in recent years, but treatment gaps remain. For example many people stop taking

Chronic disease and labour force participation in Australia: an endogenous multivariate probit analysis of clinical prevalence data


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