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full employmentsee ECONOMIC POLICY.
full employmentthe 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.