Sources of Australian labour productivity change 1950-1994

This study examines sources of Australian labour productivity change from 1950 to 1994. Time-series data are used to estimate a model capturing the interaction between labour productivity, fixed capital, human capital, telecommunications, trade openness and international competitiveness. Attention is given to the timeseries properties of these data. ADF tests for unit roots are employed, and the sensitivity of the tests to non-linear transformations and structural break are considered. Estimates suggest that policies that promote investment, economic integration and international competitiveness will improve short-run labour productivity. In the long run, fixed capital accumulation is the dominant source of productivity improvement.