Economics – Government and the macroeconomy - Employment and unemployment | e-Consult

Employment refers to the number of people in the economically active population who are currently working or have been working but have not found a job. This includes those who are self-employed.

Unemployment is the number of people in the economically active population who are actively seeking work but have not been able to find a job. It's typically measured as a percentage of the economically active population.

Full employment is a theoretical state where all those who are willing and able to work have a job. It doesn't mean zero unemployment; it acknowledges that some frictional and structural unemployment will always exist. It's a benchmark for economic health.

These definitions are crucial because they provide a framework for assessing economic performance. High unemployment suggests economic weakness, while low unemployment (close to full employment) indicates a healthy, growing economy. Understanding these definitions allows economists and policymakers to identify problems and implement appropriate policies (e.g., to reduce unemployment).