Did Australian Living Standards Stagnate between 1890 and 1940?

Abstract

Among the developed countries, Australia in the period 1890–1940 experienced the fastest growth in population but the slowest in per capita income. When adjusted to incorporate the direct deflation of consumption expenditure, however, the growth of real GDP is raised by one-third, albeit to the still modest level of 0.8 percent annually. Inspection of a number of historical social indicators, not all caught in GDP, gives no support to the hypothesis of stagnant living standards. Finally, increases in life expectancy, a shorter working week, and earlier retirement also suggest substantial improvements in dimensions of standards of living not directly reflected in measured GDP. Conservatively, we estimate that living standards may have doubled over the half-century.