When the available resources of a country are on jobs in accordance with their competence and productive capabilities this state of affairs is said to be the full employment in the economy of a country. Conversely, when the people are fit to work and offer themselves for various occupations but do not succeed in securing jobs, this is said to be a state of unemployment. In order to clearly understand the concept of full employment let us discuss various kinds of unemployment first.

Basically there are six kinds of unemployment:

Voluntary Unemployment: This means unemployment by one’s own choice. This also means that people simply do not want to do productive work. Instead, they want to remain unemployed e.g. politics (when they are out of office) or saints (who are not interested in jobs).

Involuntary Unemployment: This is the real form of unemployment. Those who fall in this category are fresh graduates who possess high qualifications but do not find any jobs commensurate with the qualifications possessed by them.

Structural Unemployment: Structural unemployment is the result of a change in the structure of the economy of a country. For example, with a rapid pace of industrial advancement in the country people shift from agriculture sector to industries but do not find any jobs there. This type of unemployment is called structural unemployment.

Frictional Unemployment: This form of unemployment takes place as a result of imperfections in the labour market. These imperfections occur due to seasonal nature of jobs, natural accidental breakdown of machinery, etc.

Technological Unemployment: This occurs as a result of change in the production technology e.g. automation or replacements of workers by machines, as robots are in production, are creating the problem of technological unemployment.

Cyclical Unemployment: In this case unemployment takes place in the depression phase of the business cycle. Unemployment during the depression phase occurs due to fall in the level of investment and consequently that of national income.

Keeping in view the above kinds of unemployment classical economists believe that voluntary unemployment is not in fact unemployment as it can be avoided and hence should not be considered. Involuntary unemployment is the real form of unemployment and the solution for this has been given by them in the marginal productivity theory of distribution discussed in an earlier chapter. The solution is that the competitive wage rate be allowed to fall to a point at which even the last man unemployment it can be overcome by reducing the wage rate with the ever declining MRP so that they both are in equilibrium. Thus according to classical economists, there cannot be any problem of unemployment. Since this can happen in a laissez fair economy, it is evident that classical economists are against strikes, collective bargaining and pressure tactics of labourers. As far as the other forms of unemployment (3-6) are concerned, these are said to be of only a temporary nature and are eliminated with the passage of time. Hence, the classical economists stable that even in the presence of these forms of unemployment there is always a tendency towards full employment. Thus, on the basis of above arguments, classical economists strongly uphold the theory that there is always full unemployment in a laissez fair economy and any divergence from it is only temporary in nature.