Full Employment: A Survey of Theory, Empirics and Policies


Aleksandr Arsenev, Meryem Gökten, Philipp Heimberger and Andreas Lichtenberger

wiiw Working Paper No. 249, June 2024
71 pages including 2 Tables and 7 Figures

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The concept of full employment is associated with diverse economic, political and social aspects. We provide a survey of theory, empirics and policy issues related to full employment. We make a novel contribution by tying together multi-dimensional aspects of full employment regarding definitions, theoretical perspectives, empirical measurements, policy debates and real-world policy programs. We distinguish: concepts of full employment that provide systematic links to price stability; minimum unemployment and maximum employment approaches; and the unfilled vacancies perspective. Furthermore, we provide and discuss different empirical measures of full employment for selected economies, and we propose a new full employment typology. Based on our survey findings, we argue that conceptualising and measuring full employment is not merely a technical task, but inevitably involves normative judgments. Finally, we discuss avenues for future research.


Keywords: full employment, NAIRU, Beveridge curve, employment, welfare states, job guarantee

JEL classification: B22, E24, E61

Countries covered: European Union, OECD

Research Areas: Macroeconomic Analysis and Policy, Labour, Migration and Income Distribution