18Each period, proportion ℧ of employed consumers lose their jobs, i.e., the “exit rate” in the current labor market is ℧. In order to raise a corresponding amount of revenues, we need to assume that there is a “birth rate” of ℧ of new employed consumers, which means a same proportion of consumers are entering the labor market each period. Combined with the assumption that τ = ℧ ×S, the severance payment and the severance payment are balanced.