A Decomposition of Changes in Labour Productivity in Australia: 1970‐71 to 1989‐90*

Abstract

We show that business‐cycle phenomena, climatic conditions and industrial structure are important determinants of annual variations in Australia's labour productivity growth. Another finding is that Australia's productivity slowdown in the 1980s was associated with a reduction in capital growth per unit of labour. The methodology relies on production functions at the industry level We analyze the sensitivity of results to the specification of these functions.