Consider a simple model where workers can be either employed or unemployed. If the job separation rate is s = 0.025 per month and the job finding rate is f = 0.475 per month, the steady state unemployment rate and expected duration of an employment spell are, respectively: 5% and 2.1 months 0.05% and 2.1 months 5% and 3.33 years 5% and 3.33 months

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Unemployment and Cost of Unemployment

Unemployment is the state of being unemployed, even when an individual is actively seeking work opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed.