Consider an economy with three types of jobs. The table below shows the jobs, the frequency with which vacancies open up on a yearly basis, and the income associated with each job. Searching for a job costs $ C per year and generates at most one job offer. There is a 20 percent chance of not receiving an offer in a year. (Note: The expected search duration for a job with probability p of appearing is 1/ p year.) Job Type Frequency Income A 30 percent $ 60,000 B 20 percent $100,000 C 30 percent $ 80,000 As a function of C, specify the optimal job search strategy if the worker maximizes her expected income net of search costs.
Consider an economy with three types of jobs. The table below shows the jobs, the frequency with which vacancies open up on a yearly basis, and the income associated with each job. Searching for a
Job Type Frequency Income
A 30 percent $ 60,000
B 20 percent $100,000
C 30 percent $ 80,000
As a function of C, specify the optimal job search strategy if the worker maximizes her expected income net of search costs.
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