IS GOVERNMENT dwindling away? You might

think so, if you took the trends for government employment for the last few years and extended them on into the 21st century. For the first time since 1947, the total number of government employees in the United States declined from 1980 to 1981. It declined again, according to figures released by the Census Bureau last week, from 1981 to 1982. It's too soon to say whether this trend will continue through the 1980s. But those two figures do provide support for the proposition that the Reagan administration, with its desire to cut back government, has made a difference.

You would be wise, however, not to give all of the credit (or blame) to any single group of politicians. The major drop between 1981 and 1982 was a decline of 88,000 educational employees at the state and local level. Lower federal education aid may have played a role here, and so perhaps did caps on state and local spending. But the most important fact is that the number of students in public elementary and secondary schools has been declining sharply. It dropped by more than 3 million from 1975 to 1982, and not all the lobbying of teachers' unions could keep the number of school employees rising in the face of that trend.

Nor does the decline in number of government employees necessarily represent a decrease in the cost of government. The federal government had 2.5 million civilian employees in 1951 and just under 3 million in the peak year of 1980--not a huge increase at all. Federal jobs, as a percentage of total employment, have tended to decline since the days of Franklin D. Roosevelt. But federal spending has, of course, risen vastly. Much of this is due to the expansion of transfer programs, in which relatively few employees send out vast sums of money. Much is due to the growth in the use of consultants and private contractors, who spend so many defense, and non-defense, federal dollars.

The shrinkage in the government work force is a departure from the sharp rise in the number of government employees through most of the 1960s and 1970s --a rise particularly sharp in this metropolitan area. Note that the shrinkage began in 1980-81. That was even before the Reagan administration's budget cuts had a chance to take effect. The decline in the number of government workers was one response to a change in public opinion, to which the Reagan administration's domestic policies were another. Now the trend seems unlikely to be reversed drastically: you don't hear Democratic presidential candidates or congressional leaders calling for policies that would sharply increase the number of public employees. Those Jeremiahs who said the trend toward an ever-larger public sector was irreversible have turned out to be wrong, if only because so many people feared they were right. It's enough to make you think democracy actually works.