Full employment

Full employment is a theoretical level of unemployment where only those who are unable to work, or who are temporarily changing jobs, are considered unemployed.

There is no one agreed definition of full employment, and different economists include or exclude different sub-categories of ‘joblessness’.

For example, some definitions of full employment exclude those who are not actively seeking work as well as those unable to work and changing jobs.

For example, the International Labour Organisation (ILO) defines full employment as a:

quote barThe level of employment where all those available, able and actively seeking work, can obtain it.

Other economists claim that full employment will exist when an economy has reached a ‘natural rate’ of unemployment. Some approaches to full employment suggest that the concept should take into account the idea of ‘underemployment’. In other words, an individual who is working, but not working to their maximum capacity, cannot be called ‘fully employed’.

For example, the ILO acknowledges that definitions of full employment should take account changes in employment patterns, such as higher labour turnover and shorter working hours.