pdf [5.3MB] - Department of Families, Housing, Community Services

Productivity losses would best be measured using a frictional approach in the shortterm and a human capital approach in the long term 7 , given relatively low rates ofunemployment in Australia over future decades 8 . Productivity losses for childrenexperiencing NFF derive from all three sources – health impacts, productivity impacts(through the educational pathway) 9 , and social/criminal impacts. Multiplicativeprobabilistic adjustments could be used to ensure there is no double-counting ofproductivity impacts where more than one impact affects a person.Informal carer costs are a result of health impacts.2.3.2.1 PRODUCTIVITY LOSSESIn the short term, most people with a specific health outcome (such as anxiety or depression)require time off work to attend medical appointments, receive treatment in hospital, or simplyrecover from their symptoms at home. In the case of criminality, court appearances can alsorequire short term absences.In the long term, health impacts, educational disruption and crime/incarceration can lead toreduced labour force participation (including through death). The reduction in the labour poolthus decreases the capacity of the economy to produce goods and services at any givenlevel of unemployment. An affected person may also choose to retire early and remainpermanently out of the workforce (‘permanently disabled’), or return to work at a lower levelof productivity through: reduced hours of work; decreased efficiency; changed responsibilities; and/or changed employment.Factors that influence whether a person returns to work, and at what level of productivity,include the following (Main et al, 2005, Spelten et al, 2002): the severity of physical and mental health impacts on functionality; economic needs to survive and provide for others; and attitudes to work and the workplace environment.The length of time that a person is out of work can have a substantial impact on theattainment of experience and hence career development.There are two components to productivity losses which are measured in this section: the initial short-run disruption until production is restored to former levels (due totemporary absences); and7 Sometimes the frictional approach is best used in the long term too, such as in situations where there is a largeunemployment or underemployment pool (eg, developing countries).8 Short run unemployment due to temporary recession has little impact on long term unemployment expectations.939