Full employment from the perspective of modern labour market theory: How high does one want to jump?

Abstract

Even in times of crisis, full employment is still an urgent political goal. The aim is to achieve and maintain as high a level of employment as possible in the long term - irrespective of economic booms and slumps. As the term 'full employment' is not precisely defined in labour market research in the eyes of the author, he attempts in this article to clarify at what point one can speak of full employment, and what full employment policy must consist of. He comes to the conclusion that full employment exists when persons looking for a job and the individual enterprises use the macroeconomically optimum amount of resources for looking for jobs or employees respectively. The ensuing conclusion for a policy of full employment is a dual one: Firstly, unemployment insurance has to be organized in such a way that the unemployed can afford to look for a job for a certain period of time and also have an incentive to do so; secondly the political powers-that-be must make sure that there are sufficient jobs available for those involved in looking for a job. (IAB)

Cite article

Gartner, H. (2008): Vollbeschäftigung aus Sicht der modernen Arbeitsmarkttheorie: Wie hoch will man springen? In: IAB-Forum No. 2, p. 9-13.