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Industry productivity and the Australia-New Zealand income gap

John Stephenson and Qing Yang ()
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John Stephenson: New Zealand Institute of Economic Research

No 2011/3, NZIER Working Paper from New Zealand Institute of Economic Research

Abstract: Differences in productivity explain much of the growing income gap between Australia and New Zealand. Good policy responses rely on understanding the sources of these differences. Seventy percent of the aggregate gap in productivity between the two countries is due to underperformance of New Zealand’s industries rather than a difference in the industrial structure of the two countries. Our findings support the idea of studying and tackling the root causes of productivity differences at the sectoral level. The significant differences in multifactor productivity also indicate the need for more focus on the quality of labour, capital, and management, and regulatory environment.

Keywords: productivity; industry; New Zealand; Australia (search for similar items in EconPapers)
JEL-codes: L11 L25 O47 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2011-09-30
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