Reducing barriers to labour force participation is crucial for raising Austria’s growth performance and increasing the capacity of the economy to respond to future challenges, notably in terms of a rapidly ageing society. This chapter considers major issues in this respect, such as policies associated with the recent pension reform and matters relating to female labour force participation. Equally important, a number of specific issues need to be addressed to ensure that labour demand meets supply. In particular, wages need to be sufficiently flexible to adjust to productivity, and non-wage labour cost needs to be reduced. Finally, education and training is increasingly important in a knowledge based society to safeguard high employment levels and boost productivity. There appears to be considerable scope to improve the efficiency of Austria’s education system, major aspects of which are considered in the last part of this chapter. A summary of present and earlier recommendations is contained in Box 4 at the end of the chapter...