This paper explores employment policies in a society which puts social valueon employment. The purpose of this exploration is to show that when weadmit the social value which most societies seem to put on employmentimplicitly, we can provide more efficient policy measures as well as a newtheoretical basis for employment policy.Attaching social value on employment brings about externality in firm’semployment decision since the social value is non-excludable. Additionally itcan be shown that employment externality has two characteristic features :duality (positive externality in hiring decision and negative externality in lay offdecision) and counter-cyclical fluctuation in the size of externality.From these features of employment externality, this paper derives two policymeasures to internalize externality and enhance social welfare, and discussestheir effects : one is a combination of lay-off tax and hiring subsidy as a pricesetting policy, the other is employment voucher trading system as a flexibleprice/fixed quantity policy. These policies are expected to have comparativeadvantages in terms of cost efficiency, low risk, and better addressingproblems related to globalization.