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Can Australia Match US Productivity Performance?


  • Ben Dolman
  • Dean Parham
  • Simon Zheng

    (Productivity Commission)


The Productivity Commission released a Staff Working Paper ‘Can Australia Match US Productivity Performance?’ (by Ben Dolman, Dean Parham and Simon Zheng) in March 2007. The paper considers whether it is feasible for Australia to match the US level of productivity. While other countries have caught up with — and even surpassed — US productivity, Australia’s catch-up has been comparatively modest and patchy. International comparisons of productivity are useful, but also have hazards. Countries’ productivity levels can vary for reasons apart from technology and efficiency. It is more meaningful to compare performance at the industry level. Some Australian industries have kept pace with their US counterparts at the productivity frontier. Other industries appear to have maintained sizeable gaps or even fallen further behind US productivity levels, in particular in manufacturing, wholesale and retail trade, utilities, communications and finance. The paper considers the extent to which geography, settlement and education have constrained, and will continue to constrain, Australia’s ability to catch up in these industries and overall. The paper concludes that Australia is well placed to keep pace with resurgent US productivity growth. It is feasible for Australia to do even better and to catch up to some extent on US productivity — although it will not be automatic and may require further policy and institutional change. But the level of US productivity should not be regarded as a target which Australia can realistically achieve over coming decades. The views expressed in this paper are those of the staff involved and do not necessarily reflect those of the Productivity Commission.

Suggested Citation

  • Ben Dolman & Dean Parham & Simon Zheng, 2007. "Can Australia Match US Productivity Performance?," Staff Working Papers 0703, Productivity Commission, Government of Australia.
  • Handle: RePEc:ris:prodsw:0703

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    References listed on IDEAS

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    Cited by:

    1. Kym Anderson & Peter Lloyd & Donald Maclaren, 2007. "Distortions to Agricultural Incentives in Australia Since World War II," The Economic Record, The Economic Society of Australia, vol. 83(263), pages 461-482, December.
    2. 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.
    3. Thierry Tressel, 2008. "Does Technological Diffusion Explain Australia’s Productivity Performance?," IMF Working Papers 08/4, International Monetary Fund.
    4. Neil Dias Karunaratne, 2015. "The Productivity Paradox and the Australian Mining Boom and Bust," Research in World Economy, Research in World Economy, Sciedu Press, vol. 6(1), pages 1-19, March.
    5. Neil Dias Karunaratne, 2013. "The mining boom, productivity conundrum and monetary policy design to combat resource curse effects in Australia," Discussion Papers Series 504, School of Economics, University of Queensland, Australia.
    6. Mark Cully, 2015. "Discussion of Firm Dynamics and Public Policy: Evidence from OECD Countries," RBA Annual Conference Volume,in: Angus Moore & John Simon (ed.), Small Business Conditions and Finance Reserve Bank of Australia.

    More about this item


    Educated workers; Labour productivity Multifactor productivity; Productivity; Skilled workers;

    JEL classification:

    • D - Microeconomics


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