New figures from the Central Statistics Office show that labour productivity growth between 2000 and 2017 stood at 3.9% - above the EU average of 1.3%.
Productivity measures the efficiency with which an economy transforms inputs into output.
Increases in productivity growth are generally associated with improvements in living standards.
But the CSO said that in the case of the Irish economy, a note of caution must be sounded because of the high concentration of foreign-owned multinationals operating here.
It said that there are many instances of very high productivity growth that result in a limited spillover into the domestic sector of the economy and in turn to Irish households.
Today's data show that labour productivity growth in the mainly domestic sector increased by an average annual rate of 2.3% while the foreign sector increased by 9.3%.
Most of the growth in productivity is explained by increased capital investment.
The CSO also noted that today increases in capital assets per worker here are amongst the largest in the EU.
