When Emmanuel Macron embarked on his recent push to reform the labour market in France, the new French president had an invaluable set of data in his back pocket.
The global recession that started a decade ago was like a big natural experiment for labour market economists: scores of countries with different labour regulations were hit with roughly the same shock at roughly the same time. This allowed economists to study which type of labour markets work under pressure, and which do not.
“Some labour markets were doing great before the crisis, but then all of a sudden, more or less from one day to another, they were struck by the crisis and they fell like [a house of cards],” says Andrea Garnero, a labour market economist at the OECD, the Paris-based club of developed countries. Now economists are drawing new lessons from the crisis, not just about how to create successful labour markets, but also how “success” should even be defined.