Question

1. Answer the following questions about your own experience in the labour force: a. When you or one of your friends is looking for a part-time job, how many weeks does it typically take? After you find a job, how many weeks does it typically last? b. From your estimates, calculate (in a rate per week) your rate of job finding f and your rate of job separation s. (Hint: If f is the rate of job finding, then the average spell of unemployment is 1/f.) c. What is the natural rate of unemployment for the population you represent? Do not copy another answer please

Answer 1

a. It takes nearly five months (20 weeks) to seek out employment. It lasts on a median for a hundred months (400 weeks).

b. L= E+U (L=labour force, E= utilized, U=unemployed)

f = the speed of job realizeing: the fraction of “unemployed” employees WHO find jobs monthly

s = the speed of job separation: the fraction of “employed” employees who lose jobs monthly

fU = the quantity of “unemployed” employees WHO realize jobs monthly

In a steady-state marketplace (where range of individuals finding job= range of individuals loosing job): fU = sE

fU = s(L – U)

fU = sl – sU

sU + fU = sl

(s + f)U = sl

U/L = s / s+f

Thus,

s = 0.01: calculative on percentage basis

f = 0.20: calculative on percentage basis

c. Natural rate of unemployment= U/L

U/L= s / s+f = zero.01/0.21 = 4.8%