Too many workers leave the labour market permanently in the course of a growing health problem, and too few people with reduced work capacity are working. This is a social as well as economic tragedy that is common to virtually all OECD countries, including Australia, Luxembourg, Spain and the United Kingdom. Health-related problems, or problems labelled as such because of societies’ inability to accommodate individual differences, are increasingly proving an obstacle to raising labour force participation rates and keeping public expenditures under control. Yet throughout the OECD area there is a shared paradox that needs explaining. Why it is that average health status is improving, yet more and more people of working-age leave the workforce and rely on health-related income support? This report explores the possible factors behind this paradox, highlights the role played by institutions and policies, and puts forward a range of recommendations aimed at improving the situation (see Box 0.1 for more details on the scope of the report).