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Does Australia’s geography affect labour productivity?


  • Bryn Battersby

    (Treasury, Government of Australia)


Over the past 40 years, Australia’s labour productivity level relative to the United States has trended slowly upwards. However, there remains a substantial gap between Australian and United States labour productivity levels. The persistence of this gap has raised questions about whether there are factors that might limit the extent to which Australia can catch-up to the United States. This paper summarises some recent Treasury work that has sought to quantify the extent to which Australia’s geography explains the productivity gap with the United States. This work has found that Australia’s geography might explain as much as half of the productivity gap with the United States.

Suggested Citation

  • Bryn Battersby, 2006. "Does Australia’s geography affect labour productivity?," Economic Roundup, The Treasury, Australian Government, issue 4, pages 67-76, November.
  • Handle: RePEc:tsy:journl:journl_tsy_er_2006_4_2

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    References listed on IDEAS

    1. Blau, David M, 1994. "Labor Force Dynamics of Older Men," Econometrica, Econometric Society, vol. 62(1), pages 117-156, January.
    2. Borland, J. & McDonald, J.T., 2000. "Displaced workers in Australia 1984-1996: Macroeconomic Conditions and Structural Change," Papers 2000-10, Tasmania - Department of Economics.
    3. Steven Kennedy & David Hedley, 2003. "A Note on Educational Attainment and Labour Force Participation in Australia," Treasury Working Papers 2003-03, The Treasury, Australian Government, revised Nov 2003.
    4. Merrilees, W J, 1983. "Pension Benefits and the Decline in Elderly Male Labour Force Participation," The Economic Record, The Economic Society of Australia, vol. 59(166), pages 260-270, September.
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    More about this item


    labour productivity; Australia; United States;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity


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