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Industry productivity and the Australia-New Zealand income gap

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  • Stephenson, John

    (New Zealand Institute of Economic Research)

  • Yang, Qing

    (New Zealand Institute of Economic Research)

Abstract

Differences in productivity explain much of the growing income gap between Australia and New Zealand. Good policy responses rely on understanding the sources of these differences. Seventy percent of the aggregate gap in productivity between the two countries is due to underperformance of New Zealand’s industries rather than a difference in the industrial structure of the two countries. Our findings support the idea of studying and tackling the root causes of productivity differences at the sectoral level. The significant differences in multifactor productivity also indicate the need for more focus on the quality of labour, capital, and management, and regulatory environment.

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File URL: http://nzier.org.nz/publication/industry-productivity-and-the-australia-new-zealand-income-gap-nzier-working-paper-20113
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Bibliographic Info

Paper provided by New Zealand Institute of Economic Research in its series NZIER Working Paper with number 2011/3.

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Length: 20 pages
Date of creation: 30 Sep 2011
Date of revision:
Handle: RePEc:ris:nzierw:2011_003

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Web page: http://www.nzier.org.nz/
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Keywords: productivity; industry; New Zealand; Australia;

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  1. Charles I. Jones & Paul M. Romer, 2010. "The New Kaldor Facts: Ideas, Institutions, Population, and Human Capital," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 224-45, January.
  2. Timmer,Marcel P. & Inklaar,Robert & O'Mahony,Mary & Ark,Bart van, 2010. "Economic Growth in Europe," Cambridge Books, Cambridge University Press, number 9780521198875.
  3. Dale W. Jorgenson & Marcel P. Timmer, 2011. "Structural Change in Advanced Nations: A New Set of Stylised Facts," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(1), pages 1-29, 03.
  4. Julia Hall & Grant Scobie, 2005. "Capital Shallowness: A Problem for New Zealand?," Treasury Working Paper Series 05/05, New Zealand Treasury.
  5. Charles R. Hulten, 2001. "Total Factor Productivity. A Short Biography," NBER Chapters, in: New Developments in Productivity Analysis, pages 1-54 National Bureau of Economic Research, Inc.
  6. Barry Bosworth & Susan M. Collins, 2008. "Accounting for Growth: Comparing China and India," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 45-66, Winter.
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