Historical or “time series” data on output and hours worked show the importance of increases in labor productivity to economic growth in the United States. … With growth in productivity, an economy is able to produce—and consume—increasingly more goods and services for the same amount of work.

Does productivity increase of affect economic growth?

Increases in productivity allow firms to produce greater output for the same level of input, earn higher revenues, and ultimately generate higher Gross Domestic Product. …

What is the impact of productivity?

Productivity is generally measured as the ratio of the total output to total input. In an economy, higher productivity leads to higher real income, the ability to enjoy more leisure time, and better social services, such as health and education–all leading to higher living standards.