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

Schofield, Deborah, Cunich, Michelle M., Shrestha, Rupendra N., Passey, Megan E., Veerman, Lennert, Callander, Emily J., Kelly, Simon J. and Tanton, Robert (2014) The economic impact of diabetes through lost labour force participation on individuals and government: Evidence from a microsimulation model. BMC Public Health, 14 1: 220.1-220.8. doi:10.1186/1471-2458-14-220


Author Schofield, Deborah
Cunich, Michelle M.
Shrestha, Rupendra N.
Passey, Megan E.
Veerman, Lennert
Callander, Emily J.
Kelly, Simon J.
Tanton, Robert
Title The economic impact of diabetes through lost labour force participation on individuals and government: Evidence from a microsimulation model
Journal name BMC Public Health   Check publisher's open access policy
ISSN 1471-2458
Publication date 2014-03-04
Sub-type Article (original research)
DOI 10.1186/1471-2458-14-220
Open Access Status DOI
Volume 14
Issue 1
Start page 220.1
End page 220.8
Total pages 8
Place of publication London, United Kingdom
Publisher BioMed Central Ltd.
Collection year 2015
Language eng
Subject 3400 Veterinary
Formatted abstract
Background: 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, Health&WealthMOD2030, 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 
Keyword Chronic disease
Diabetes
Economic costs
Government welfare payments
Microsimulation modelling
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2015 Collection
School of Public Health Publications
 
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