Is demography destiny? The role of structural and demographic factors in Australia's past and future labour supply

Abstract

Following the release of the Intergenerational Report, the Australian Treasury identified the levers to address the economic effects of demographic ageing as 'the three Ps': population, participation and productivity. To date, the first 'P', population, has been treated as an exogenous factor, with the common view being that there is very little that the government can do to supplant demographic ageing. Focusing upon labour supply, this paper shows how variation in Australia's underlying demography can significantly alter Australia's future labour supply. Although governments cannot redirect the cohort flow component of population ageing, much can be achieved in promoting growth of the labou..