NOTE: A revised version of this paper appears in Federalism and Labour Market Policy, Alain Noël, ed., Montreal: McGill and Queen's University Press. 2004, pp. 25-82.

Federal constitutional authority to raise revenue and control commerce among the states governed development of labor market policy in the United States. Labor market support initiatives usually have been forged in difficult economic times with contributions and compromise from the full political spectrum.

This paper examines the development of employment policy in the twentieth century by viewing the interplay of federal, state, and local partners. The programs considered include unemployment insurance, training, youth programs, and the employment service. Some attention is also given to governmental policy that influences the geographic mobility of labor.

Intergovernmental relations in labor market policy have resulted in a system that performs a wide variety of functions, varies greatly at the local and state levels, but maintains important federal standards nationwide.