Productivity Inequality

Shipei Zeng, Stephanie Parsons, Walter Diewert and Kevin J. Fox

Discussion Papers from Economic Statistics Centre of Excellence

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.

Keywords: productivity decomposition; technical progress; efficiency change; industry performance (search for similar items in EconPapers)
JEL-codes: C43 D24 O47 (search for similar items in EconPapers)
Date: 2026-10-09
New Economics Papers: this item is included in nep-eff
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