The relationship between productivity, employment and GDP: an analysis on Italian provinces Objectives - The paper aims at describing the relationship between productivity, employment and GDP for the Italian provinces in the period 1995-2003. This relationship is analysed from a static, as well as from a dynamic point of view. Methods and Results The paper applies the so-called augmented fundamental identity as described by Van Ark and McGuckin. This equation allows the analysis of the differences between per capita income and productivity. The identity equation shows that the difference between GDP and productivity can be decomposed into several labour market indicators. In this way the effect of working hours, of employment, of the working age population and the effect of labour force participation on the GDP can be quantified. The identity can be calculated for levels, as well as for growth rates. Analysing the growth rates provides inside into the changes of the relationships between the involved indicators. Conclusions The analysis shows that the differences of the provincial GDP between northern and southern Italy are to a large part due to differences in the labour market indicators. If instead of the static view are analysed the dynamic development of the indicators (1995-2003), the variation of the growth rates between northern and southern Italy are much less pronounced.