Productivity Dynamics and Long-Run Growth: Principality of Liechtenstein
Selected Issues Papers, April 21, 2026
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- Productivity Dynamics and Long-Run Growth: Principality of Liechtenstein
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Bibliographic details
- Authors: Tara Iyer, Andinet Woldemichael
- Published: April 21, 2026
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229045186.018
Overview
- This Selected Issues Paper analyzes productivity and long-run growth in Liechtenstein.
- Despite among the highest labor productivity levels in Europe, growth has been weak over an extended period, leading to declining relative performance.
- Sectoral differences persist between high-productivity manufacturing and lower-productivity services.
- The paper emphasizes that sustaining high living standards will require targeted structural reforms, including upgrading human capital, expanding labor supply, strengthening public-private innovation partnerships, and improving physical and digital infrastructure.
Key findings
- Labor productivity: Liechtenstein is described as having among the highest labor productivity levels in Europe.
- Growth performance: Growth has been weak over an extended period, resulting in declining relative performance.
- Sectoral productivity: Persistent differences between high-productivity manufacturing and lower-productivity services are highlighted.
- Innovation: Private innovation is strong, but its potential is constrained by other factors.
Constraints to long-run growth
- Demographic pressures.
- Skills shortages.
- Reliance on cross-border commuters.
- Infrastructure bottlenecks (physical and digital).
Policy recommendations
- Upgrade human capital.
- Expand labor supply.
- Strengthen public-private innovation partnerships.
- Improve physical and digital infrastructure.
Content in this bundle
- Sipea2026033