I argue for increased reliance on non-U.S. data and policy evaluations to understand basic labor- market parameters and to predict the effects of changes in U.S. labor-market policies. Foreign experiences generate exogenous shocks to labor costs that create unusual opportunities to measure...

The paper documents the large cross-country differences in labor institutions that make them a candidate explanatory factor for the divergent economic performance of countries and reviews what economists have learned about the effects of these institutions on economic outcomes. It identifies...