One-period job search model: Let us consider the standard one-period job search model we discussed in...

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One-period job search model: Let us consider the standard one-period job search model we discussed in the lecture. Specif- ically, the one-period consists of three stages. • Everyone is unemployed • Individuals search for a job, which is costless. As a result of a job search, everyone finds a job. There are three jobs, low, medium and high. Their probability mass function is with probability p WM, with probability q WL₂ with probability 1-p-q W WH, Here, wи > WM > WL. Answer the following questions 1. If flow utility of unemployment, b, is greater than w, then the unemployment rate, mean wage, and wage inequality (the coefficient of variation). One-period job search model: Let us consider the standard one-period job search model we discussed in the lecture. Specif- ically, the one-period consists of three stages. • Everyone is unemployed • Individuals search for a job, which is costless. As a result of a job search, everyone finds a job. There are three jobs, low, medium and high. Their probability mass function is with probability p WM, with probability q WL₂ with probability 1-p-q W WH, Here, wи > WM > WL. Answer the following questions 1. If flow utility of unemployment, b, is greater than w, then the unemployment rate, mean wage, and wage inequality (the coefficient of variation).

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If the flow utility of unemployment b is greater than the wage for any job w then individuals would ... View the full answer