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Comparing Australian and United States productivity

Author

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  • Jyoti Rahman

    (Treasury, Government of Australia)

Abstract

Despite a series of broad and deep macroeconomic and microeconomic reforms boosting Australia's productivity growth, the level of Australia’s GDP per capita remains well below that of the United States. A continuing gap in the levels of productivity plays a central role in explaining Australia’s GDP per capita relative to the US. This paper reviews various explanations for the Australia-US productivity gap and finds that the productivity gap can at least in part be explained by a combination of: differences in human capital as represented by educational attainment; differences in product and labour market policies; and the geographic and historical context in which the Australian economy operates. Differences in physical capital per worker and industry structures do not appear to be primary explanations for the productivity gap.

Suggested Citation

  • Jyoti Rahman, 2005. "Comparing Australian and United States productivity," Economic Roundup, The Treasury, Australian Government, issue 2, pages 27-45, June.
    • Handle: RePEc:tsy:journl:journl_tsy_er_2005_2_2
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    File URL: http://archive.treasury.gov.au/documents/987/PDF/04_comparing_productivity.pdf
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    References listed on IDEAS

    as
    1. Andrea Bassanini & Stefano Scarpetta, 2001. "Does Human Capital Matter for Growth in OECD Countries?: Evidence from Pooled Mean-Group Estimates," OECD Economics Department Working Papers 282, OECD Publishing.
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    6. Lewis Evans & Patrick Hughes, 2003. "Competition Policy in Small Distant Open Economies: Some Lessons from the Economics Literature," Treasury Working Paper Series 03/31, New Zealand Treasury.
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    Citations

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    Cited by:

    1. Gregory, Robert G., 2012. "Living standards, terms of trade and foreign ownership: reflections on the Australian mining boom," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(2), pages 1-30.
    2. Evans, Lewis, 2009. "Capital Market Integration: The Structure of the New Zealand Economy and its Capital Markets," Working Paper Series 4035, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    3. Ben Dolman & Lan Lu & Jyoti Rahman, 2006. "Understanding productivity trends," Economic Roundup, The Treasury, Australian Government, issue 1, pages 35-52, March.
    4. Gene Tunny, 2006. "Educational attainment in Australia," Economic Roundup, The Treasury, Australian Government, issue 2, pages 1-9, May.
    5. Dean Parham, 2005. "Is Australia’s Productivity Surge Over?," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 12(3), pages 253-266.

    More about this item

    Keywords

    gross domestic product; human capital; microeconomics; productivity;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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