Australia's ageing labour force: how should government respond

An examination of Labour Force Survey data from May 1997 to May 2000 suggests that the long-term decline in labour force participation for older Australian men has recently abated. This shift may be already reflecting the emergence of a new set labour market conditions linked to the declining rate of growth of the Australian labour force due to population ageing. The data show that the growth in the employment of men in older age groups has exceeded the growth of these groups due to population ageing. Further, older men are satisfying employer demand in a range of occupations, including higher-skilled occupations and, in the majority of cases, on a full-time basis. The paper argues that the challenge of ensuring a vibrant and responsive economy can be met despite labour force ageing if sufficient resources are committed to Australia’s human capital development and if sufficient measures are taken to stem the incidence of early retirement. It is further argued that a decisive shift in strategic outlook by national leaders would be necessary to the success of an intensive human capital approach to maintaining productivity growth. Whereas the 1980s and 1990s were dominated by a preoccupation with capital widening and aggregate economic growth, premised on population growth, a human capital based response to labour market ageing would require a strategic refocussing upon per capita economic growth. Copyright. Monash University and the author/s