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Productivity Inequality

Author

Listed:
  • Zeng, Shipei
  • Parsons, Stephanie
  • Diewert, W. Erwin
  • Fox, Kevin J.

Abstract

We find substantial differences in productivity growth and its drivers across the industries and regions of Australia. At the aggregate market sector level over a 35 year period to 2024-25, technical progress has been the only significant driver of productivity growth. This is heavily offset by growing inefficiency, leading the level of productivity to fall from 200304. Weighting industries by value added share, Mining, Construction and Electricity, gas, water and waste services are found to account for the bulk of the aggregate efficiency loss. Differences across states are less extreme than across industries, though the two most mining-intensive states have had strong technical progress with deteriorating efficiency. This diversity complicates the development of pro-productivity policies. To raise productivity growth in the short run, the results suggest that a focus on closing gaps to existing best practice may be an attractive alternative to investments in technological innovations.

Suggested Citation

  • Zeng, Shipei & Parsons, Stephanie & Diewert, W. Erwin & Fox, Kevin J., 2026. "Productivity Inequality," Discussion Papers escoe-dp-2026-14, Economic Statistics Centre of Excellence.
    • Handle: RePEc:eoe:escoed:escoe-dp-2026-14
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    References listed on IDEAS

    as
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    More about this item

    Keywords

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    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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