Introduction The objective of this chapter is to study how employment is determined in the labor market We are considering the labor market in which the following relation should always hold L=N+U above.L is the labor force. n the level of employment and u is the unemployedIntroduction • The objective of this chapter is to study how employment is determined in the labor market • We are considering the labor market in which the following relation should always hold: L = N+U Above, L is the labor force, N the level of employment and U is the unemployed