Assume the following labour market is at its long-term equilibrium. There are 900 employed workers in...

  

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Assume the following labour market is at its long-term equilibrium. There are 900 employed workers in the economy and the unemployment rate is 10%. The probability for an employed worker to lose their job in any given month is s= 5% a) Use the definition of the unemployment rate to derive the number of unemployed work- ers U in the economy. b) What is the probability f, that an unemployed worker will find a job in a given month? c) How long does it take on average for an unemployed worker to find a job? Which labour market institutions (policies) impact this duration? d) The advent of online job searching sites has increased the monthly job finding to fa 0.5, while s has remained constant. What is the new equilibrium in the labour market? What is the unemployment rate, and what are the flows in and out of unemployment? Assume the following labour market is at its long-term equilibrium. There are 900 employed workers in the economy and the unemployment rate is 10%. The probability for an employed worker to lose their job in any given month is s= 5% a) Use the definition of the unemployment rate to derive the number of unemployed work- ers U in the economy. b) What is the probability f, that an unemployed worker will find a job in a given month? c) How long does it take on average for an unemployed worker to find a job? Which labour market institutions (policies) impact this duration? d) The advent of online job searching sites has increased the monthly job finding to fa 0.5, while s has remained constant. What is the new equilibrium in the labour market? What is the unemployment rate, and what are the flows in and out of unemployment?