The first section of the study on lowering the permanent rate of unemployment discusses the effects and limitations of increasing aggregate demand through fiscal and monetary policy and indicates the inability to achieve the desired level of unemployment simply by stimulating demand. Section 2 analyzes the characteristics and structure of our current unemployment. The specific problems of unemployment among young workers are examined in the third section, and a number of possible policies are suggested. Section 4 discusses the four major sources of unnecessarily high unemployment among adult workers and specific policies are suggested. Section 5 deals with the particular problem of improving the incentive effects of unemployment compensation. A brief summary section is followed by critical comments on the innovative and controversial policy suggestions offered in the study; five economists and statisticians with expertise in the area of employment and unemployment analysis were invited by the committee to comment. The author's reply is included. (Author/AJ)