Dean Dunlop announced today that he will resign at the end of the term to become director of the Cost of Living Council in the Nixon Administration.

Dunlop will take the office under a new "Phase Three" program which President Nixon announced today. Under Phase Three, wage and price controls will be based on voluntary compliance.

The change eliminates the Pay Board and the Price Commission which, in Phase Two, decided whether specific contracts were inflationary beyond the general guidelines laid out by the Council.

Dunlop will replace Donald Rumsfeld, who is leaving to become ambassador to NATO.

Dunlop has been dean of the Faculty since July 1, 1970. Although he has resigned as dean effective February 5, he will take the customary two-year leave of absense from his position as University Professor. He will come to Cambridge on Saturday and Sunday during the Spring term.

"Instead of flying to Washington every weekend, he'll be flying to Cambridge," Dean Whitlock said yesterday.

Dunlop has been commuting regularly to Washingten since 1971, when he became chairman of the Construction Industry Stabilization Board. The construction industry has been and will continue to be exempt from the general wage-price guidelines. Its contracts are evaluated by the Construction industry Stabilization Board a 12 man group with industry, labor and public representatives.

Dunlop has been considering whether to take the directorship of the Cost of Living Council since early December. President Bok said today Bok said he thought that the structural reforms of Phase Three namely, the eliminstion of the Price Commission and the Pay Board had made the job more attractive to Dunlop.

"My guess is that the could have involved himself any was he wanted to in the pass", Bok said "I don't think that Phase Two offered the since opportunities to work at the problems he's interested in"

Bok said that he has not yet considered the selection of Dunlop successor. He said he hopes to discuss the question with the Faculty Council next Wednesday.

The transition problems are not thought to be too great, since Dunlop has already completed many of his responsibilities for the academic year.

In his letter, Dunlop said he expects to complete "the major budgetary, personnel and related recommendations" that the dean makes at this time. Although these recommendations were traditionally submitted later in Spring, they have been made progressively earlier in recent years.

As dean of the Faculty, Dunlop is in charge of 40 budgets. About half of these are departmental budgets, and the rest are those of related institutions, such as the Arnold Arboretum and Dunbarton Oaks.

The dean has also completed the Department of Health, Education and Welfare affirmative action goals for the hiring of women and minority group faculty.

Dunlop met with the Committee on Houses and Undergraduate Life (CHUL) last night and, according to Dean Whitlock, he is close to deciding the tuition, room and board fees for next year.

Born in California in 1914, Dunlop received the A.B. and Ph.D. degrees at the University of California.

He came to Harvard in 1938 as a teaching fellow in Economics, and he became a professor of Economics in 1950. On January 1, 1970, he became acting dean of the Faculty, and he became permanent dean on July 1.

Known for his gruff tone and often earthy wit, Dunlop, in the opinion of many, has been able to keep together a politically fragmented Faculty by exerting his forceful personality.

An unparalleled workhorse, he often did business before breakfast, while many of his junior colleagues were still asleep. Even today, he called his secretary from Washington to dictate a letter.

Dunlop's Washington responsibilities over the past 25 years centered on his involvement with the construction industry. In 1948 he first served as a mediator in construction industry jurisdictional disputes. He served on the Wage Stabilization Board from 1950-1952, and he was a member of the President's Committee on Equal Employment Opportunity from 1963 to 1964. Dunlop was chairman of the National Manpower Policy Task Force from 1968 to 1969.