FULL EMPLOYMENT AND THE NEW ECONOMICS ‐A COMMENT
| Author | Mordechai E. Lando |
| Published date | 01 February 1970 |
| DOI | http://doi.org/10.1111/j.1467-9485.1970.tb00489.x |
| Date | 01 February 1970 |
FULL EMPLOYMENT
AND THE NEW ECONOMICS
-A COMMENT
MORDECHA~
E.
LANDO
Professor Killingsworth’s paper
‘
Full Employment and the New Econom-
ics
’l
contains
many
controversial hypotheses.
I
prefer to avoid the pitfalls
of the
‘
aggregate demand
’
versus
‘
structural change
’
controversy, and will
just comment on some of the strained interpretations Killingsworth places
on
the data.
In
his Table 111, Killingsworth shows that employment
of
males with
no
high school education (his
‘
lower half
’)
decreased by
1.8
million
between
1962
and
1967.
He neglects to mention that the population
of
males
18
and older with no
high
school education decreased by
2.2
million during this peri0d.l In other words the ‘very large reductions
in
employment’ were due to the fact that there were fewer people
of
this type extant
at
the end of the period. Population decline is sufficient
to explain the decreases in labour force and employment.
Killingsworth admits that part of the shrinkage
was
due to death and
retirement and continues
on
to say
:
‘But
a
major part was due to
de-
clining labour force participation rates even in the central working ages,
25
to
55.
Hence,
a
substantial part of the decrease
in
the officially
reported unemployment rates resulted simply from an increase in hidden
unemployment
at
the lower educational levels.’l
No
evidence
is
cited
to
support the contention of declining participation rates for people in the
‘
lower half
’
aged
25-55.
Table
I
contains the relevant data for males,
25-54
with
8
years or less
of
schooling. Between
1962
and
1967,
the participation rate for this group
decreased by
0.4
per cent.
If
the
1962
participation rate had prevailed
in
1967,
the labour force would have been
28,000
larger than it
in
fact was.
Let us assume with Killingsworth that all
28,000
represent
‘
hidden
unemployment’
and
add them to the official unemployment figures for
a
total of
331,000
unemployed and an unemployment rate of
5
per cent. (in
place of
303,000
and
4.8
per cent. in Table
I).
The adjusted number
of
unemployed is still only half the number unemployed
in
1962
and the
unemployment rate is still
3.2
per cent. below what it was in
1962.
The
1
This
journal, February 1969,
pp.
1-19.
2
Data
from
U.S.
Department
of
Commerce,
Current
Population
Reports
Series 9-20,
Nos.
121 and 169. ‘Educational Attainment
for
March 1962 and
March 1967.‘
This
journal, February 1969,
p.
16.
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