EU labour productivity divergence accelerates post-2019, the third EEI study on productivity shows

A new study by the European Employers’ Institute (EEI), conducted by Rexecode, finds that the EU–US labour productivity gap has widened significantly since 2019.

In 2024, EU hourly labour productivity reached $72/hour (PPP) compared with $116/hour in the United States - a 38% gap. Over 2019–2024, US productivity grew by +9.7%, while the EU recorded only +2.4%, deepening the gap by 6.7%.

The report highlights four main drivers: the EU’s employment-preservation approach during the pandemic, the US digital and AI investment boom, Europe’s industrial competitiveness shock (energy, regulation, China), and weaker private demand and investment.

"The message is clear: Europe must remove barriers to competitiveness and step up investment if it wants to close the gap," said Delphine Rudelli, Chair of the Board of EEI, "Productivity must return to the centre of the EU’s growth strategy.”

The study warns that the EU now faces both structural and cyclical disadvantages, while the US benefits from a strong technology-driven rebound.

Read the full study: https://bit.ly/4iwOVDB

Background information on the Study

This study is the third in a three-part series analysing the EU-US labour productivity gap. It follows the first report, "Understanding the EU-US Labour Productivity Gap: #1 - The Broad Perspective" (15 September 2025), and the second report, “Understanding the EU–US Labour Productivity Gap: #2 - A Granular Analysis (1995–2019)” (30 October 2025), which examined long-term sectoral and country-level dynamics.

The third study, “Understanding the EU–US Labour Productivity Gap: #3 — The Amplified Divergence (2019–2024)”, focuses on the most recent period marked by the pandemic, energy crisis, and geopolitical tensions.

About the European Employers’ Institute

The European Employers Institute (EEI) is a research institute, founded by European and national employer organisations in March 2024. The EEI focuses on emerging employment and social policy topics at the European level, producing research studies, analyses and publications. It aims to ensure balanced representation on employment issues and strengthen social dialogue at the European level.