THE OCCUPATIONAL MOBILITY OF UNEMPLOYED LABOUR Available to Purchase

Introduction Much concern has been expressed in recent years about the long‐run trend of unemployment in the UK. Abstracting from short‐run cyclical swings, the trend has been upwards for at least the last 20 years. The available evidence suggests that this trend has become more pronounced over time, so that by the mid‐1980s the long‐run equilibrium rate of unemployment was around eleven per cent. If the notion of the “non‐accelerating inflation rate of unemployment” is accepted — as it now is by most economists — this means that demand management policies alone can never restore the persistently low levels of unemployment enjoyed during the post‐war period. The main aim of labour market policies must be to act directly on the non‐accelerating inflation rate of unemployment (NAIRU) itself. Only thus can the long‐run trend be reversed.