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The purpose of this paper is to assess the evolution of labour‐market performance in the Organization for Economic Co‐operation and Development (OECD) over the last decade, considering the robustness of the claims made in an important OECD follow‐up study.

The paper sets up an empirical framework calibrated on an important OECD follow‐up study, and suggests some ways in which the impact of unobserved heterogeneity and outliers on policy estimates can be treated in a cross‐section framework. The framework applies to the data for 30 OECD countries.

The paper finds that changes in labour‐market performance are inversely linked to lagged unemployment. Changes in the share of construction workers are also significant even in the presence of various kinds of policy change indicators. As far as the latter are concerned, the results highlight the role of unemployment benefits and, especially, active labour‐market policies.

The kind of policy change indicators used do not allow the adoption of panel data techniques.

An important policy role seems to emerge for unemployment benefit reforms and, even more so, active labour‐market policies. The evidence also supports the contention that the construction sector is important for labour‐market performance.

The paper brings to the fore novel evidence about cross‐country labour‐market performance at a time when this issue is of high interest for citizens and policy‐makers.

The purpose of this paper is to introduce the special issue on “Labour, productivity and growth”.

The paper discusses the articles in the special issue, which investigate the main theme – labour, productivity and growth – from different points of view by employing a variety of econometric methods. These include improvement of the evaluation of the impact of labour market flexibility on economic performance, analysis of the macroeconomic law of decreasing returns to labour, a new panel co‐integration method, and a reinterpretation of co‐integration analysis to assess the impact of incomes policy. Institutional variables, in particular the system of industrial relations, are duly considered.

The papers in the special issue highlight different causes of sluggish economic (productivity) growth in Europe, in the light of not only traditional macroeconomic variables, such as total factor productivity and labour market flexibility, but also such factors as neo‐corporatist industrial relations and management practices, which are generally neglected in the literature.

The paper introduces a number of articles proposing innovations in the interpretation and application of a wide range of theoretical approaches and econometric methodologies. It also discusses several policy suggestions for fighting sluggish productivity growth, including investment in research and development, human capital, flexicurity, innovative industrial relations practices and high‐performance workplace practices also considered capable of affecting macroeconomic performance.