full employment

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Related to Total employment: Cyclical unemployment, full employment, Natural rate of unemployment, Employment rate

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


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 ?
Even though the unemployment rate was worse during Reagan's first term and the economy suffered its infamous double-dip recession, total employment dropped in only one year.
Calderdale was the only council district in Yorkshire to report a fall in total employment.
auto repair industry lost 49 percent of its jobs, but at the same time took on new employees in jobs equivalent to 56 percent of total employment in the industry.
Still, the growth in total employment indicates that the labor market is continuing to improve, the government said in a statement.
Thompson examined total employment - a broader category than wage-and-salary jobs.
By 2000, manufacturing employment made up only 16 percent of total employment.
As a result, total employment may rise by only 1%, and the unemployment rate may average 5.
4 percent of the state's total employment base--and was indirectly responsible for the employment of 509,200 people in related industries.
They showed that the wage discrimination doesn't change total employment of a monopsony if the supply curves of labor in two separate markets are linear, and that Pigou-Robinson's proposition applies to the input markets.
And as a percentage of total employment, both are about a full point lower than in the early 1980s.
Twenty-two percent of responding companies planned to increase total employment in the second quarter, while 6% expected cutbacks.
The revised estimates of total employment for 1988 were about 1.

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