Mums at home "the greatest untapped potential" says OECD study on Australian labour force

Young women at home looking after children represent "the greatest untapped potential" in Australia's workforce, according to an OECD report out today.

The Organisation for Economic Cooperation and Development also warns the Australian economy will continue to suffer unless mothers are encouraged back to work.

"There are potentially large losses to the economy when women stay at home or work short part-time hours, " the OECD says in its study of employment participation in Australia.

"One of the areas of greatest untapped potential in the Australian labour force is inactive and/or part time working women, especially those with children."

READ the OECD study

The OECD says tapping the potential of women, especially highly educated stay at home mums, would be a boost to the Australian economy.

The study says economic growth in OECD countries would increase by 20 percent over the next twenty years if female labour participation matched the level of men.

The reality check on the potential of women who chose to stay at home with their children coincides with the decision by Laborfrontbencher Kate Ellis to quit politics to spend more time with her young son.

However, the OECD maintains that paid employment is "important for women's personal well-being and perceptions of their overall quality of life."

According to the study, the employment rate of Australian women aged between 25 and 54 is at 72.5 percent but ranks in the lower third of OECD countries.

The employment rate of single mothers is 50.8 percent, the third lowest in the OECD ranking after Ireland and Turkey.

It also found that 54 women aged between 25 and 34 have university qualifications compared to 43 percent of men.

The OECD found that people with a disability, a mental health condition and disadvantaged youth are badly represented in Australia's labour force.

"These groups face considerable and other multiple barriers to employment," the OECD says.

"Lacking work experience, low education and poor health are the single most important employment barriers."

The OECD has urged a better combination of various government policies to assist overrepresented groups in particular indigenous Australians.