A labor market-oriented study of the effects of internationalization provided background for National Commission for Employment Policy (NCEP) recommendations on ways to enhance the ability of the U.S. economy to compete in world markets. The analysis focuses on three major dimensions: (1) trade in goods and services; (2) immigrants (legal and illegal) and refugees; and (3) investment in physical and human capital. The first half of the 1980s was characterized by an expansive fiscal policy combined with a restrictive monetary policy. The resulting pattern of demand favored job growth in service and white collar jobs, often displacing workers in the manufacturing sector. Trade can be viewed as part of the solution of economic realignment. Research on immigrants and refugees concentrated on empirical studies in specific local and regional labor markets. Factors such as time in the United States, knowledge of English, previous educational attainment, and the availability of family or ethnic group support affect the rate at which new arrivals enter the economic mainstream. An important characteristic of investment in the modern world is that it takes place across international boundaries. Investment in human capital is an international phenomenon, an important part of economic competitiveness. In order to remain competitive, the country's work force must be improved to increase productivity. Public and private resources should be allocated to education. Saving and investing is favored over borrowing and consuming, to help the economy work more equitably and efficiently. However, the international dimension shortens the amount of lead time to respond. (A list of NCEP-sponsored research on employment and internationalization, 13 references, and a list of NCEP publications are included.) (NLA)