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Why Was Australia So Rich?

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  • Ian W. McLean

    (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://128.118.178.162/eps/dev/papers/0509/0509003.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0509003.

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Length: 40 pages
Date of creation: 07 Sep 2005
Date of revision:
Handle: RePEc:wpa:wuwpdc:0509003

Note: Type of Document - pdf; pages: 40
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Web page: http://128.118.178.162

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Keywords: comparative growth; Australian economic history;

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References

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Citations

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Cited by:
  1. Ian W. McLean, 2010. "Responding to Shocks: Australia's Institutions and Policies," School of Economics Working Papers, University of Adelaide, School of Economics 2010-30, University of Adelaide, School of Economics.
  2. Anderson, Kym & Lattimore, Ralph G. & Lloyd, Peter J. & MacLaren, Donald, 2008. "Distortions to Agricultural Incentives in Australia and New Zealand," Agricultural Distortions Working Paper, World Bank 48387, World Bank.
  3. Simon Ville & Olav Wicken, 2012. "The Dynamics of Resource-Based Economic Development: Evidence from Australia and Norway," Economics Working Papers, School of Economics, University of Wollongong, NSW, Australia wp12-04, School of Economics, University of Wollongong, NSW, Australia.

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