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Feature Article - Population, Participation and Productivity - Contributions to Australia's Economic Growth
Real gross domestic product per capita
There are many ways of analysing economic growth. One illuminating perspective is in terms of changes in the amount and productivity of labour. This style of analysis, which was used in Intergenerational Report: 2002-03 Budget Paper No. 5, released by the Commonwealth Treasurer in May 2002, begins from the following decomposition:
Each of these components is examined in more detail in the following sections.
Real GDP per hour worked
Between March 1993 and March 2003, the amount of real GDP per hour worked rose by more than 20% - an annual average growth of 1.8%.
Between March 1993 and March 2003, the average hours worked by employed persons fell by 3% - an annual average fall of 0.3%.
Between March 1993 and March 2003, the proportion of the labour force that was employed rose from 89% to 94% - an annual average growth of 0.5%. This was mirrored by a fall in the unemployment rate, and reflected in part the generally buoyant state of the Australian economy through the past decade.
Between March 1993 and March 2003, the labour force participation rate rose from 62% to 64% - an annual average growth of 0.3%.
Between March 1993 and March 2003, the proportion of the population that was 15 years of age or more rose from 78% to 80% - an annual average growth of 0.2%. This is consistent with the pattern of structural population ageing in Australia.
Of the five components, the largest contributor to the growth in real per capita GDP during the past decade has been the improvement in labour productivity.
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