ROBERT M. SOLOW
Employment Policy in
FINE DISTINCTIONS make bad policy. They may, however, be necessary
for clear thinking. So it is with selective-employment policies: there are
practical limits to the refinement with which programs can be tailored to
meet very particular circumstances. But if the task is to understand whether
selective-employment policies become especially advantageous, compared
with more generalized macroeconomic policy tools, in a period of substantial
inflation, then some precision about objectives may be called for.
THE CASE FOR SELECTIVE-EMPLOYMENT POLICY
There are three distinguishable, though connected, reasons why selectiveemployment policies might be preferred to other fiscal policy devices, such
as tax reduction or general government expenditure, whether or not the
background is inflationary.
|1. ||Selective-employment policies may be more effective, in the sense that they
generate a larger increase in aggregate employment per dollar of gross
government expenditure, or per dollar of incremental net budgetary deficit.
This criterion is commonly described by the slogan "more bang for a buck,"
though often without clear definition of the "bang" -- employment, wage bill,|