The Employment Service (ES) was established by the Wagner-Peyser Act of 1933. The act established a nationwide network of state-operated, federally financed employment service offices to match workers to jobs. The following services are performed by the ES: employment counseling, special assistance to target populations, the "work test" for unemployment insurance claimants, certification of individuals for a tax credit program, enforcement and compliance activities, and labor market information. Additional responsibilities include placement of veterans, addressing post-World War II employment trends, importation of foreign workers, and services to dislocated workers. The ES has served millions of persons. Five key issues may improve employment service operations: (1) the role of ES--whom should it serve and what services should be provided; (2) the relationship between ES and Job Training Partnership Act; (3) the appropriate role of the ES in administering the "work test"; (4) the role of the ES in enforcement and compliance activities; and (5) financing the ES and allocation of resources. ES programs and agencies can coordinate when objectives are well specified. (Endnotes, 41 references and 2 appendices are included. Appendix A contains a list of witnesses at two hearings on "Improving the Effectiveness of the Employment System" and appendix B lists other individuals providing testimony.) (NLA)