Please Share the below Post
Rate this post

Definition:

The concept of full employment has been defined differently by different economists.

Lord Beveridge defines full employment as:

“Having always more vacant jobs for men”.

Keynes defines full employment negatively as:

“The absence of involuntary unemployment”.

If we take literary meaning of full employment, it means complete absence of unemployment. Then practically speaking, it is not possible to achieve full employment. Some sort of unemployment is bound exist in a country.

For example, there are some people who remain unemployed for a short time due to changing over from one job to another. Then there are some people who are learning a new job and are on probation getting a very limited sum or receiving nothing. All such person are fractionally unemployed. So long as the number of fractionally unemployed person dose not exceed three to five percent the total labor force, then full employment is said to exist.

We may, if we like name it as high level of employment. It should be noted that while considering the aggregate labor force a country, children, old persons, disabled persons, and the drones who do not care work, or who are not able to work are excluded from the total labor force. The total labor force of a country consists of only those persons who are able and willing to work.

We can thus up that the existence of full employment all that is necessary is that there should be at least:

“As may unfilled jobs as there are unemployed persons and that normal time lag between losing one job and finding another is short”.

Measures of Full Employment:

There are three main measures by which full employment can be attained and maintained in a country. They are:

(1) Fiscal Policy.

(2) Monetary Policy.

(3) Public Works.

Fiscal policy refers to the measures which a government takes for the management of its budget. It is the desire of every government that the budget of a country is shaped in such a manner that it should help in slowing down the swings of business cycle and maintaining high progressive level of employment without causing inflation in the country.

So when a government finds that private investment is decreasing in a country and the income of people is falling, it increases public expenditure. In order to encourage private investment, it gives grant or bounties or relief in taxation to the people. When private investment increases too high, the government reduces its own expenditure and increases taxes so that full employment without inflation is achieved at.

Monetary policy refers to the measures which a, government takes for regulating the money supply in a country. It is generally associated with the supply of credit and the rate of interest. The government can encourage investment and maintain high level of employment by lowering the rate of interest and keeping the supply of money adequate.

Construction of Public Works: By public works is meant the construction of projects designed for public welfare or works carried out by government with the public funds. Highways, canals, bridges, parks, and public buildings, etc., are examples of public works. In the period of depression, government can increase the level of employment by launching public works program.

In case of over full employment, the expenditure on public works can be curtailed so that the level of full employment is attained at without inflation. It should be noted that in a country it is not simply the high level employment or full employment which is the desired goal. If a country achieves full employment through inflation, then certainly its consequences will be disastrous. So what the economy needs is that there should be high level of employment but not accompanied by inflation.