Under pressure from a changing global economy, countries have adapted their labor markets. This project develops a framework to describe and explain these adaptations. I argue against the conventional wisdom that globalization leads to a 'race to the bottom' deregulation of the labor market. Instead, I hypothesize that countries have followed three distinct paths of labor-market adaptation, depending on their political and labor market institutions. Liberal Market Economies, exemplified by the United States, have followed a strategy of liberalization. Coordinated Market Economies such as Germany have pursued segmentation, while Hierarchical Market Economies like Argentina went on a path of informalization. Using large-n quantitative evidence as well as in-depth case studies of the United States, Germany, and Argentina, I test three alternative hypotheses about the mechanisms driving adaptation, based respectively on labor unions, employer interests, and administrative structure. Through the exploration of these questions, I address the critical but mostly neglected topic of the political underpinnings of labor market adjustment in the global economy. I do so by building on a sociological literature - largely ignored by political scientists - that takes seriously 'marginalized workers' in informal and non-standard jobs. Moreover, I bring together separate literatures on the political economy of advanced and developing industrialized countries, helping to bridge hardened and increasingly artificial regional boundaries within political science.