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Suppose at the beginning of the year, employment, E , equals 2,000 in a small town with an adult, non-institutionalized population of 5,000. There are 1,500 individuals out of the labor force, N . Over the course of the year, the following flows occur:
NU = 200 EU = 150
NE = 300 UN = 600
EN = 150 UE = 600
Please diagram and explain the flows.
Calculate the unemployment and labor force participation rates at the beginning and end of the year assuming there is no change in the size of the adult non-institutionalized population.
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