Abstract
BackgroundDiabetes is a debilitating and costly condition. The costs of reduced labour force participation due to diabetes can have severe economic impacts on individuals by reducing their living standards during working and retirement years.MethodsA purpose-built microsimulation model of Australians aged 45-64 years in 2010, Health&WealthMOD2030, was used to estimate the lost savings at age 65 due to premature exit from the labour force because of diabetes. Regression models were used to examine the differences between the projected savings and retirement incomes of people at age 65 for those currently working full or part time with no chronic health condition, full or part time with diabetes, and people not in the labour force due to diabetes.ResultsAll Australians aged 45-65 years who are employed full time in 2010 will have accumulated some savings at age 65; whereas only 90.5% of those who are out of the labour force due to diabetes will have done so. By the time they reach age 65, those who retire from the labour force early due to diabetes have a median projected savings of less than $35,000. This is far lower than the median value of total savings for those who remained in the labour force full time with no chronic condition, projected to have $638,000 at age 65.ConclusionsNot only does premature retirement due to diabetes limit the immediate income available to individuals with this condition, but it also reduces their long-term financial capacity by reducing their accumulated savings and the income these savings could generate in retirement. Policies designed to support the labour force participation of those with diabetes, or interventions to prevent the onset of the disease itself, should be a priority to preserve living standards comparable with others who do not suffer from this condition.
Highlights
IntroductionIt is widely recognised that people with diabetes have a higher risk of reducing their labour force participation compared to people without this condition [1,2,3,4,5,6]
All Australians aged 45-65 years who are employed full time in 2010 will have accumulated some savings at age 65; whereas only 90.5% of those who are out of the labour force due to diabetes will have done so. By the time they reach age 65, those who retire from the labour force early due to diabetes have a median projected savings of less than $35,000
This is far lower than the median value of total savings for those who remained in the labour force full time with no chronic condition, projected to have $638,000 at age 65
Summary
It is widely recognised that people with diabetes have a higher risk of reducing their labour force participation compared to people without this condition [1,2,3,4,5,6]. Reducing labour force participation or retiring prematurely due to diabetes limits an individual’s ability to save for their retirement and this reducing their living standards for the rest of their lives. This will be important in the future as governments seek ways of managing this severe, debilitating and costly disease; a disease which currently affects an estimated 246 million people globally [1]. The costs of reduced labour force participation due to diabetes can have severe economic impacts on individuals by reducing their living standards during working and retirement years
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