Labour productivity is the ratio of total labour compensation per hour worked to output per hour worked.

Growth in gross domestic product (GDP) per capita can be broken down into growth in labour productivity and changes in the extent of labour utilisation.

Labour productivity is a key dimension of economic performance and an essential driver of changes in living standards. High labour productivity growth can reflect greater use of capital, and a decrease in the employment of low-productivity workers, or general efficiency gains and innovation.

It is measured as growth in GDP per hour worked and as changes in hours worked per capita.