In periods of nonrecessionary activity, United States government policymakers should subsidize retraining as they subsidize job search by way of the unemployment compensation system. The retraining subsidy to a person who is faced with a reduced demand for his services from his current job should be about the same order of magnitude as the job-search subsidy provided by the unemployment compensation system. Also, the subsidy should support both institutional and on-the-job retraining, be provided to both men and women, and be administered by the public Employment Service. An additional return from improving the allocation between search and retraining is the reduction of the unemployment rate as conventionally measured in the United States. There is an economic rationale for the subsidization of college-level training for middle-class women who have stayed home with their children until the children have reached school age. A large proportion of these women will train their children inefficiently without such a subsidy. This rationale also justifies the extension of these opportunities for such women beyond the urban areas where the existing college-level training programs tend to be concentrated. (EM)