IDEAS home Printed from https://ideas.repec.org/a/eee/exehis/v44y2007i4p635-656.html
   My bibliography  Save this article

Why was Australia so rich?

Author

Listed:
  • 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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • McLean, Ian W., 2007. "Why was Australia so rich?," Explorations in Economic History, Elsevier, vol. 44(4), pages 635-656, October.
  • Handle: RePEc:eee:exehis:v:44:y:2007:i:4:p:635-656
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0014-4983(06)00056-8
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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, Oxford University Press, vol. 114(1), pages 83-116.
    2. Mitchener, Kris James & McLean, Ian W., 1999. "U.S.Regional Growth And Convergence, 1880–1980," The Journal of Economic History, Cambridge University Press, vol. 59(04), pages 1016-1042, December.
    3. 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.
    4. 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.
    5. Robert J. Gordon, 2004. "Two Centuries of Economic Growth: Europe Chasing the American Frontier," NBER Working Papers 10662, National Bureau of Economic Research, Inc.
    6. Sachs, J-D & Warner, A-M, 1995. "Natural Resource Abundance and Economic Growth," Papers 517a, Harvard - Institute for International Development.
    7. O'Rourke, Kevin H, 2000. "Tariffs and Growth in the Late 19th Century," Economic Journal, Royal Economic Society, vol. 110(463), pages 456-483, April.
    8. 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.
    9. repec:hoo:wpaper:e-92-3 is not listed on IDEAS
    10. Olivier Blanchard, 2004. "The Economic Future of Europe," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 3-26, Fall.
    11. Claudio Bravo-Ortega & Jose De Gregorio, "undated". "The Relative Richness of the Poor? Natural Resources, Human Capital and Economic Growth," Working Papers Central Bank of Chile 139, Central Bank of Chile.
    12. 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.
    13. Broadberry, Stephen N. & Irwin, Douglas A., 2006. "Labor productivity in the United States and the United Kingdom during the nineteenth century," Explorations in Economic History, Elsevier, vol. 43(2), pages 257-279, April.
    14. 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.
    15. Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 317-334, December.
    16. Sachs, Jeffrey D. & Warner, Andrew M., 1999. "The big push, natural resource booms and growth," Journal of Development Economics, Elsevier, vol. 59(1), pages 43-76, June.
    17. 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.
    18. 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.
    19. Robert A. Margo, 1992. "The Labor Force in the Nineteenth Century," NBER Historical Working Papers 0040, National Bureau of Economic Research, Inc.
    20. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(02), pages 385-406, June.
    21. Prados de la Escosura, Leandro, 2000. "International Comparisons of Real Product, 1820-1990: An Alternative Data Set," Explorations in Economic History, Elsevier, vol. 37(1), pages 1-41, January.
    22. 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 203-245, March.
    23. Abramovitz, Moses & David, Paul A, 1973. "Reinterpreting Economic Growth: Parables and Realities," American Economic Review, American Economic Association, vol. 63(2), pages 428-439, May.
    24. Michael A. Clemens & Jeffrey G. Williamson, 2001. "A Tariff-Growth Paradox? Protection's Impact the World Around 1875-1997," NBER Working Papers 8459, National Bureau of Economic Research, Inc.
    25. 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 151-162, June.
    26. 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.
    27. Bernard, Andrew B & Jones, Charles I, 1996. "Productivity and Convergence across U.S. States and Industries," Empirical Economics, Springer, vol. 21(1), pages 113-135.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. A. Bergeaud & G. Cette & R. Lecat, 2015. "GDP per capita in advanced countries over the 20th century," Working papers 549, Banque de France.
    2. Antonin Bergeaud & Gilbert Cette & Rémy Lecat, 2014. "Le produit intérieur brut par habitant sur longue période en France et dans les pays avancés : le rôle de la productivité et de l’emploi," Économie et Statistique, Programme National Persée, vol. 474(1), pages 5-34.
    3. Laura Panza & Jeffrey G. Williamson, 2017. "Australian Exceptionalism? Inequality and Living Standards 1821-1871," CEH Discussion Papers 01, Centre for Economic History, Research School of Economics, Australian National University.
    4. Bergeaud, A. & Cette, G. & Lecat, R., 2015. "Productivity trends from 1890 to 2012 in advanced countries," Rue de la Banque, Banque de France, issue 07, June..
    5. 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.
    6. David Greasley & Jakob B. Madsen, 2017. "The Rise and Fall of Exceptional Australian Incomes Since 1800," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 57(3), pages 264-290, November.
    7. Antonin Bergeaud & Gilbert Cette & Rémy Lecat, 2016. "Productivity Trends in Advanced Countries between 1890 and 2012," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 420-444, September.
    8. Simon Ville & Olav Wicken, 2013. "The dynamics of resource-based economic development: evidence from Australia and Norway," Industrial and Corporate Change, Oxford University Press, vol. 22(5), pages 1341-1371, October.
    9. 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.
    10. Rajabrata Banerjee & Martin Shanahan, 2016. "The Contribution of Wheat to Australian Agriculture from 1861 to 1939," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 56(2), pages 125-150, July.

    More about this item

    JEL classification:

    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:exehis:v:44:y:2007:i:4:p:635-656. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/622830 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.