Full Employment

A situation in which there is no cyclical unemployment. Full employment does not mean there is no unemployment, since there may be frictional unemployment as persons move from old positions into new ones. Some economists hold that full employment occurs when unemployment falls to the rate below which inflation accelerates, though other economists dispute this idea. See also: NAIRU.

full employment

see ECONOMIC POLICY.

full employment

the full utilization of all available labour (and capital) resources so that the economy is able to produce at the limits of its POTENTIAL GROSS NATIONAL PRODUCT. Full employment is one of the main objectives of MACROECONOMIC POLICY. In practice, of course, 100% employment cannot be achieved. Inevitably there will always be some unemployment present because of labour turnover and people spending time searching for and selecting new jobs, and because of structural changes in the economy - job losses in declining trades that require people to transfer to new jobs created in expanding sectors. Accordingly, a more realistic interpretation of full employment suggests itself: full employment is achieved when the number of registered unemployed (see UNEMPLOYMENT RATE) is equal to the number of job vacancies (see VACANCY RATE). Even these measures, however, do not give an accurate estimate because many groups, like housewives and older workers, may fail to register as unemployed when job prospects are bleak even though they wish to work (DISGUISED UNEMPLOYMENT).

For macroeconomic purposes, however, most governments tend to specify their full employment objectives in terms of some ‘targeted’ level of unemployment (e.g. 5% of the total labour force), although the exact target level is rarely publicly disclosed. See UNEMPLOYMENT, FIXED TARGETS ( APPROACH TO MACROECONOMIC POLICY), SUPPLY-SIDE ECONOMICS.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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References in periodicals archive

Coretta Scott King's actions were pivotal in developing what would become the 1978 Full Employment and Balanced Growth Act, better known as the Humphrey-Hawkins Act, after its Senate sponsor (Minnesota's Hubert Humphrey) and its sponsor in the House (California's Augustus Hawkins).

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There is no method for directly measuring full employment. Rather, it is a theoretical state within the economy that must be estimated.

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This means the provincial government is in a strong position to meet the target of full employment.

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Capital, for the reasons offered by Kalecki, has little motive to support the implementation of socialised investment, as the maintenance of full employment shifts relative economic and political power from capital to labour.

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"This is shocking and underlines for me even more starkly why our crusade for full employment in our generation is so important."

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The economic policies should always be aimed at full employment--full employment demand and full employment supply.

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Kate Stanley, associate director of the IPPR, said: "Last week unemployment fell, but full employment is still some way off and very difficult to achieve."

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Americans close the door to immigration when they feel their own economic status is in peril--and welcome immigrants when full employment means entry-level workers are needed.

America's love-hate relationship with immigrants: one college president questions the renewed animosity toward this group

The First Minister, whose minority government is widely expected to face defeat in next year's National Assembly election, will come out fighting at the Manchester conference by telling how Wales is now a 'full employment society'.

YOU GOTTA HAVE FAITH!