The labor force and unemployed and employed

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Assume that in Babilonia no one is born or dies, but just spend their life either out of the labor force, or in the labor force and unemployed, or employed. Assume crucially that these percentages are unchanged, year after year. Every year 1% of those out of the labor force enter the labor force and 3.5% of those unemployed leave the labor force. Assume also that every year 24% of the unemployed find jobs, while 3% of those employed lose jobs, and become unemployed.

• What are the steady-state percentages of Babilonia residents out of the labor force, in the labor force and unemployed, and employed.

Reference no: EM131101344

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