Suppose that all social programs simultaneously become more generous. In particular suppose that there is an increase in UI benefits of $500, and also an increase in welfare benefits of $500, which are represented in the two-sided search model as payments to everyone who is not in the labor force. What will be the effects on • the unemployment rate, U , • the vacancy rate, v, • the labor force, Q, • the number of firms, A, • aggregate output, Y , and • labor market tightness, j ≡ A/Q?
Suppose that all social programs simultaneously become more generous. In particular suppose that there is an increase in UI benefits of $500, and also an increase in welfare benefits of $500, which are represented in the two-sided search model as payments to everyone who is not in the labor force. What will be the effects on • the unemployment rate, U , • the vacancy rate, v, • the labor force, Q, • the number of firms, A, • aggregate output, Y , and • labor market tightness, j ≡ A/Q?
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter26: Earnings, Productivity, And The Job Market
Section: Chapter Questions
Problem 7CQ
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Suppose that all social programs simultaneously become more generous. In particular suppose that
there is an increase in UI benefits of $500, and also an increase in welfare benefits of $500, which
are represented in the two-sided search model as payments to everyone who is not in the labor force.
What will be the effects on
• theunemployment rate, U ,
• the vacancy rate, v,
• the labor force, Q,
• the number of firms, A,
•aggregate output , Y , and
• labor market tightness, j ≡ A/Q?
there is an increase in UI benefits of $500, and also an increase in welfare benefits of $500, which
are represented in the two-sided search model as payments to everyone who is not in the labor force.
What will be the effects on
• the
• the vacancy rate, v,
• the labor force, Q,
• the number of firms, A,
•
• labor market tightness, j ≡ A/Q?
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