full employment


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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.

References in periodicals archive ?
I'm a strong believer in multiple objectives for monetary policy as spelled out by the Federal Reserve Act, namely price stability but also stabilizing output and attaining full employment.
worked to deliver full employment in the process", and worked to deliver excellence in education for all our children.
This rate would be appropriate when the economy is sitting happily at both full employment and price stability.
If that happens, Scotland's employment rate would rise above 80 per cent, regarded by economists as full employment.
We are getting pretty close to full employment in Wales, particularly in the north-east where success has been driven by massive investment at Airbus.
In his keynote speech to the Labour Party Conference in Bournemouth today, the Chancellor said that in his Pre-Budget Report later this year he would "set out a plan for full employment, not just for one region of the country but full employment for every region and nation of Britain.
Mr Brown promised: "I will set out a plan for full employment - not just for one region of the country but full employment for every region and nation of Britain.
Mr Olner said: "For the first time in a generation, we are able to say that full employment is within reach.
Chancellor Mr Gordon Brown will today commit Labour to achieving full employment within a generation.
For social democracy to be viable as an economic alternative to neoliberalism, the restoration and maintenance of full employment is fundamental.
For example, I do not argue "that further growth will not produce full employment, eliminate poverty, remove income inequalities or protect the environment.