ABSTRACT
During the 1990s and early 2000s, the average annual rate of growth of inflation-adjusted
per capita income in the Solomon Islands was only about 1 percent, well below the global
average over that interval of about 4 percent. Economists who studied the Solomon Islands’
economy over this period found that key variables associated with the country’s slower pace
of economic growth were essentially unchanged inflation-adjusted wages earned by workers
and stagnant worker productivity-that is, a nearly unchanged proportionate increase in
output resulting from the addition of another unit of labor. After the early 2000s, however,
both inflation-adjusted wages and worker productivity grew considerably. Corresponding to
the upswings in real wages and labor productivity was an increased rate of economic growth.
