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Labor Economics 5th Edition by George Borjas
Edition 5ISBN: 978-0073511368Labor Economics 5th Edition by George Borjas
Edition 5ISBN: 978-0073511368 Exercise 17
Suppose 25,000 persons become unemployed. You are given the following data about the length of unemployment spells in the economy:
where the exit rate for month t gives the fraction of unemployed persons who have been unemployed t months and who "escape" unemployment at the end of the month.
(a) How many unemployment-months will the 25,000 unemployed workers experience
(b) What fraction of persons who are unemployed are "long-term unemployed" in that their unemployment spells will last 5 or more months
(c) What fraction of unemployment months can be attributed to persons who are long-term unemployed
(d) What is the nature of the unemployment problem in this example: too many workers losing their jobs or too many long spells
where the exit rate for month t gives the fraction of unemployed persons who have been unemployed t months and who "escape" unemployment at the end of the month. (a) How many unemployment-months will the 25,000 unemployed workers experience
(b) What fraction of persons who are unemployed are "long-term unemployed" in that their unemployment spells will last 5 or more months
(c) What fraction of unemployment months can be attributed to persons who are long-term unemployed
(d) What is the nature of the unemployment problem in this example: too many workers losing their jobs or too many long spells
Explanation
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Use table to do the calculations: 
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Labor Economics 5th Edition by George Borjas
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