According to the optimum currency area (OCA) theory, labor market flexibility is one of the key criteria that determine whether a geographical entity is a good candidate to become part of a currency union — or adopt any type of fixed exchange rate regime, for that matter. It is therefore surprising that there have been no attempts so far in the literature to quantitatively investigate the relationship between labor market flexibility and currency regime choices in an in-depth manner. In this context, we investigate whether economies with more flexible labor markets aremore likely to adopt a fixed exchange rate system. With a global time-series cross-sectional sample, we find empirical support for our hypothesis. The findings are robust to different classifications of the dependent variable, the use of time and country fixed effects, as well as an instrumental variable estimation.