(Full) Employment Policy: Theory and Practice

Levy Economics Institute Working Paper No. 258

27 Pages Posted: 17 Mar 1999

Date Written: December 1998


Although the U.S. unemployment rate in 1998 was at its lowest level since the late 1960s, the nation's employment problem is still far from solved. Although many economists assume that unemployment tends toward a natural rate below which it cannot go without creating inflation, this paper asks whether the current employment policies will be able to deal with the challenges of the next downturn. To evaluate these questions, the author examines the relative merits of three proposed strategies to improve the employment situation - a reduced workweek, employment subsidies, and a public service job opportunity program - to see if they will meet the challenges of upholding an individual's basic right to job while not stimulating inflation. He finds that a shorter workweek and wage subsidies both have failed to meet one or both of these challenges, but that a public service job opportunity program, such as the "employer of last resort policy," would satisfy both the full employment and noninflationary criteria.

JEL Classification: E24

Suggested Citation

Papadimitriou, Dimitri B., (Full) Employment Policy: Theory and Practice (December 1998). Levy Economics Institute Working Paper No. 258, Available at SSRN: https://ssrn.com/abstract=147992 or http://dx.doi.org/10.2139/ssrn.147992

Dimitri B. Papadimitriou (Contact Author)

Bard College - Levy Economics Institute ( email )

Annandale-on-Hudson, NY 12504
United States
845-758 7711 (Phone)
845-758 9424 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics