In a well-known book, Layard, Nickell, and Jackman (LNJ) tried to measure how unemployment is related to labor market institutions. Using a cross-section of 20 OECD countries for 1983-1988, they found that changes in inflation and labor market institutions can explain most of the unemployment differences across countries. In recent years unemployment has been acute in several countries, particularly in Europe, and there is controversy whether labor market policies should be altered. This study examines whether Layard, Nickell, and Jackman's original findings can be replicated. Extending the sample period to 1989-2002, and using alternative specifications for the same group of OECD ...

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