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What is Full Employment?

AS, A-Level, IB
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Last updated 15 Oct 2017

This short revision video looks at the concept of full employment and asks whether the UK economy can reach full-employment in the current economic cycle.

There is no universally-agreed definition of full-employment; two standard definitions include the absence of demand deficient unemployment and a situation when the number of job vacancies equals the number of people actively seeking work. But many politicians focus on the employment rate rather than the unemployment rate when they set ambitious targets to reach full-employment.

Unemployment rate in the UK economy over the long run


Under-employment occurs when people are counted as
  1. Looking for an extra job or actively searching for a new job with longer hours to replace their current (main) job
  2. They prefer to work longer hours in their current job
  3. Under-employment also means that workers are under-utilized in terms of their ability / qualifications / experience
  4. Under-employment can be rising even though unemployment is declining. Under-employment makes the official unemployment figure look better than it is.

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