What is the probability that an unemployed worker

Assignment Help Econometrics
Reference no: EM131132192

Unemployment spells and long-term unemployment According to the data presented in this chapter, about 47% of unemployed workers leave unemployment each month.

a. What is the probability that an unemployed worker will still be unemployed after one month? two months? six months? Now consider the composition of the unemployment pool. We will use a simple experiment to determine the proportion of the unemployed who have been unemployed six months or more. Suppose the number of unemployed workers is constant and equal to x (where x is some constant). Each month, 47% of the unemployed find jobs, and an equivalent number of previously employed workers become unemployed.

b. Consider the group of x workers who are unemployed this month. After a month, what percentage of this group will still be unemployed? (Hint: If 47% of unemployed workers find jobs every month, what percentage of the original x unemployed workers did not find jobs in the first month?)

c. After a second month, what percentage of the original x unemployed workers has been unemployed for at least two months? [Hint: Given your answer to part (b), what percentage of those unemployed for at least one month do not find jobs in the second month?] After the sixth month, what percentage of the original x unemployed workers has been unemployed for at least six months?

d. Using Table B-44 of the Economic Report of the President (www.gpoaccess.gov/eop/), compute the proportion of unemployed who have been unemployed six months or more (27 weeks or more) for each year between 1996 and 2010. How do these numbers compare with the answer you obtained in part (c)? Can you guess what may account for the difference between the actual numbers and the answer you obtained in this problem? (Hint: Suppose that the probability of exiting unemployment goes down the longer you are unemployed.)

e. Part of the policy response to the crisis was an extension of the length of time that an unemployed worker could receive unemployment benefits. How would you predict this change would affect the proportion of those unemployed more than six months?

Reference no: EM131132192

Questions Cloud

Orders based on the on hand quantity in stock : A Manager was heard to complain, “I have some items that have a two week review interval, and it takes four weeks for resupply. Every two week, I place orders based on the on hand quantity in stock. Now I seem to have too much inventory.” What went w..
What type of identity choice michael has : what type of identity choice Michael has? -  confusion - foreclosure - moratorium - achievement
Describe the typical prospect as an individual : Describe the typical buying motives of a prospect looking for insurance . Describe the typical prospect as an individual (and as a company representative, if appropriate)How are prospects identified in most cases?
Discuss the probable cost structure for each of these items : Consider the following types of items carried in a retail store: Light bulbs, compact discs, and refrigerated drugs. Discuss the probable cost structure for each of these items, including item cost, carrying cost, ordering cost and stock out cost.
What is the probability that an unemployed worker : Part of the policy response to the crisis was an extension of the length of time that an unemployed worker could receive unemployment benefits. How would you predict this change would affect the proportion of those unemployed more than six months?
Implications for our understanding of humanity or yourself : Identify and describe three "things" from each chapter that you learned and want to remember - what are some implications for our understanding of humanity or yourself?
Identify the different types of inventories : Identify the different types of inventories (raw materials, work in process and finished goods) carried in the following organizations: gas station, hamburger stand, clothing store, and machine shop. What functions (purposes) do these inventories per..
Replenishment philosophy of inventory management : What is the difference between requirements philosophy and a replenishment philosophy of inventory management? Why is this difference important?
Show the initial gdp conditions in these countries : Consider the following graph created be Heston and others. It shows per capita GDP growth rates of various countries (1960-2010) on the vertical axis and 1960 per capita GDP (in dollars) of those countries on the horizontal axis. The 1960 GDP numb..

Reviews

Write a Review

 

Econometrics Questions & Answers

  Explain will the money supply expand more for federal resrve

Assume that the reserve requirement is 5%. All other things equal, will the money supply expand more if the Federal Reserve busy $2,000 worth of bonds or if someone deposits in a bank $2,000 that he had been hiding in his cookie jar

  What is the price elasticity of demand

Suppose the income of buyers (Y) increases by 10 percent (calculated as change in Y/average Y) and, as a result, the quantity demanded of the good increases by 2 percent (calculated as change in Qd/average Qd). Check the correct statement(s): A. T..

  Does the ability to move first give the employeran advantage

If so, how? As the employee, is there anything you could do to realize a higher payoff?

  By how much has the money supply increased

Prepare a two- to three-page analysis by answering the questions below. Be sure to cite your references using APA format. Assume that the Bank of Ecoville has the following balance sheet and the Fed has a 10% reserve requirement in place: BALANCE SHE..

  What percentage of the cars have four-cylinder engines

a. What is the average miles per gallon for city driving b. On average, how much higher is the miles per gallon for highway driving as compared to city driving c. What percentage of the cars have four-cylinder engines

  What is measured in terms of the odds of dying

The article states that between 285 and 1,437 people in the United States could die if everyone were vaccinated against smallpox. The population in the United State is about 300 million people.

  What is rubinlands equilibrium output

Rubinland is a small island economy that has no taxes, no transfer payments, no government purchases, no exports, and no imports. Rubinland's economy is represented by the following equations: C = 5,000 + 0.6Y I = 5,000 where C represents consumpti..

  Show that the preferred relation is transitive for mac

Mac Rowe doesn't sweat the petty stuff. In fact, he just cannot detect small differences. He consumes two goods, x and y. He prefers the bundle (x,y) to the bundle (x',y') if and only if (xy - x'y' > 1) . Otherwise he is indifferent between the tw..

  How much was the growth rate of real gdp per capita

Suppose the real GDP of a country increased from 2,000 billion to 2,100 billion in one year. In the same year, population growth rate was 3%. How much was the growth rate of real GDP per capita in that year

  What is the irr-internal rate of return

An investor deposits $30,000 annually at the end of each year for the next 15 years. At the end of the 16th year he starts to withdraw a geometric series of 20 annual payments, each 5% larger than the previous one. If the first payment is $50,000

  What are the autarky prices of food and cloth

What are the autarky prices of food and cloth?

  What is the profit maximizing condition for the firm

Suppose that there is an adverse oil supply shock. Show the impact that this has on the production function, the labor market (i.e. on equilibrium wage and labor), and on the actual amount of output. SHOW a diagram and DISCUSS your findings.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd