The purpose of the study is to determine the most significant external effects or so-called externalities in the social and labor sphere and to assess the directions of the market and institutional response to them in Russia. The object of the study is external effects that find their expression in social and labor relations. The research methods are analysis and synthesis, induction, and deduction. Based on materials from current publications, the legislation of the Russian Federation describes the most significant external effects on social and labor relations. Among the research results are the identification of the most significant externalities manifested in the social and labor sphere, their subjects, sphere of manifestation, and mechanisms of distribution. The study concludes the advisability of responding to external effects in the social and labor sphere on the part of the state and individual organizations. A scheme for the organization's response to externalities is proposed, taking into account the expediency of such a response and the use of adequate tools for this.