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Why Was Australia So Rich?

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  • Ian W. McLean

    ()
    (School of Economics, University of Adelaide)

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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File URL: http://www.economics.adelaide.edu.au/research/papers/doc/wp2005-11.pdf
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Bibliographic Info

Paper provided by University of Adelaide, School of Economics in its series School of Economics Working Papers with number 2005-11.

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Length: 40 pages
Date of creation: Aug 2005
Date of revision:
Handle: RePEc:adl:wpaper:2005-11

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Postal: Adelaide SA 5005
Phone: (618) 8303 5540
Web page: http://www.economics.adelaide.edu.au/
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Related research

Keywords: comparative growth; Australian economic history;

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References

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  1. Nicholas Crafts, 1998. "Forging Ahead and Falling Behind: The Rise and Relative Decline of the First Industrial Nation," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 193-210, Spring.
  2. Huberman, Michael, 2004. "Working Hours of the World Unite? New International Evidence of Worktime, 1870 1913," The Journal of Economic History, Cambridge University Press, vol. 64(04), pages 964-1001, December.
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  4. 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.
  5. Ian W. McLean, 2005. "Recovery from Depression: Australia in an Argentine Mirror: 1895- 1913," Economic History 0512001, EconWPA.
  6. 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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  8. Goldin, Claudia, 1998. "America's Graduation from High School: The Evolution and Spread of Secondary Schooling in the Twentieth Century," The Journal of Economic History, Cambridge University Press, vol. 58(02), pages 345-374, June.
  9. Ian W. McLean & Alan M. Taylor, 2001. "Australian growth: a California perspective," Pacific Basin Working Paper Series 2001-06, Federal Reserve Bank of San Francisco.
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  16. repec:fth:stanho:e-92-3 is not listed on IDEAS
  17. Haig, Bryan, 1989. "International Comparisons of Australian GDP in the 19th Century," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 35(2), pages 151-62, June.
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  23. Broadberry, Stephen N., 1998. "How Did the United States and Germany Overtake Britian? A Sectoral Analysis of Comparative Productivity Levels, 1870–1990," The Journal of Economic History, Cambridge University Press, vol. 58(02), pages 375-407, June.
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Citations

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Cited by:
  1. 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.
  2. 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.
  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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