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Why was Australia so rich?

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  • McLean, Ian W.

Abstract

Between 1870 and 1890 Australian incomes per capita were 40 percent or more above those in the United States. About half this gap is attributable to Australia's higher labor input per capita, and half to its higher labor productivity. The higher labor input is due in part to favorable demographic attributes stemming especially from the gold rush era, and partly to a favorable workforce participation rate. The higher labor productivity appears to result from an advantageous natural resource endowment. By 1914 the income lead over the U.S. had all but disappeared. This is ascribed to declines in Australia's advantages both in labor input per capita and in labor productivity. It is argued that these declines are due neither to the effects of the 1890s depression, nor to changes in trade policy, but to the transitory or unsustainable nature of Australia's earlier sources of income advantage.

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Bibliographic Info

Article provided by Elsevier in its journal Explorations in Economic History.

Volume (Year): 44 (2007)
Issue (Month): 4 (October)
Pages: 635-656

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Handle: RePEc:eee:exehis:v:44:y:2007:i:4:p:635-656

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Web page: http://www.elsevier.com/locate/inca/622830

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  1. Kiminori Matsuyama, 1991. "Agricultural Productivity, Comparative Advantage and Economic Growth," NBER Working Papers 3606, National Bureau of Economic Research, Inc.
  2. Kris J. Mitchener & Ian W. McLean, 1998. "U.S. Regional Growth and Convergence, 1880-1980," School of Economics Working Papers 1998-04, University of Adelaide, School of Economics.
  3. David, Paul A & Wright, Gavin, 1997. "Increasing Returns and the Genesis of American Resource Abundance," Industrial and Corporate Change, Oxford University Press, vol. 6(2), pages 203-45, March.
  4. IanW. McLean, 2006. "Recovery From Depression: Australia In An Argentine Mirror 1895-1913," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 46(3), pages 215-241, November.
  5. Abramovitz, Moses & David, Paul A, 1973. "Reinterpreting Economic Growth: Parables and Realities," American Economic Review, American Economic Association, vol. 63(2), pages 428-39, May.
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  7. Mitchener, Kris James & McLean, Ian W, 2003. " The Productivity of US States since 1880," Journal of Economic Growth, Springer, vol. 8(1), pages 73-114, March.
  8. Goldin, Claudia, 1998. "America's Graduation from High School: The Evolution and Spread of Secondary Schooling in the Twentieth Century," Scholarly Articles 2664307, Harvard University Department of Economics.
  9. Maddock, Rodney & McLean, Ian, 1984. "Supply-Side Shocks: The Case of Australian Gold," The Journal of Economic History, Cambridge University Press, vol. 44(04), pages 1047-1067, December.
  10. Ian W. McLean & Alan M. Taylor, 2001. "Australian Growth: A California Perspective," NBER Working Papers 8408, National Bureau of Economic Research, Inc.
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  18. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
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  26. repec:fth:stanho:e-92-3 is not listed on IDEAS
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Cited by:
  1. Anderson, Kym & Lattimore, Ralph G. & Lloyd, Peter J. & MacLaren, Donald, 2007. "Distortions to Agricultural Incentives in Australia and New Zealand," 2007 Conference (51st), February 13-16, 2007, Queenstown, New Zealand 10407, Australian Agricultural and Resource Economics Society.
  2. Simon Ville & Olav Wicken, 2012. "The Dynamics of Resource-Based Economic Development: Evidence from Australia and Norway," Economics Working Papers wp12-04, School of Economics, University of Wollongong, NSW, Australia.
  3. Ian W. McLean, 2010. "Responding to Shocks: Australia's Institutions and Policies," School of Economics Working Papers 2010-30, University of Adelaide, School of Economics.

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