Please explain this diagram, i am quite confused.

Fig. 6.6 Labour market flows N (s +Z)f N Ns (1-f) AUF U OLF Note: The notation is explained in Section 6.2. N is employment, / is unemployment and OLF is the stock of workers outside the labour force. The probability to find a job is f for an employed job seeker is and of for an unemployed job seeker. A share Z of the employed workers seek another job and switch if they find one. A fraction s of the employed workers leave their jobs for exogenous reasons and seek another job. Thus the flow from unemployment to employment is AUf, the turnover between jobs is N (s + Z)f, and the flow from employment to unemployment is Ns (1 -f). flows between employment and unemployment, but also directly between jobs and in and out of the labour force. Some employed workers are involuntarily laid off, but more often workers leave their jobs voluntarily, often going directly to another job. Fig. 6.6 illustrates the flows between the different stocks in the labour market. The notation for the different flows will be explained in the next section. The magnitudes of these flows vary between countries. In the US, the flows are large. Estimates suggest that, each month, 2.6 percent of employed workers switch directly from one job to another without going through a period in unemploy- ment and 1.5 percent of the employed workers become unemployed.' Also, about 2 percent of the employed workers leave the labour force and a similar number enter the labour force, going directly into jobs. This means that about 6 percent of employed workers leave their jobs each month (2.6 + 1.5 + 2= 6.1). The flow from unemployment to employment is similar to the flow in the reverse direction - 1.5 percent of employment. With an unemployment rate that is normally around 6 percent in the US, this means that each month about a quar- ter of the unemployed workers find jobs. Another 12 percent of the unemployed workers leave the labour force, that is, they stop seeking work, so the exit rate from unemployment is about 37 percent (25 + 12 percent). In most European countries, the flows are smaller. For Germany, Michael Burda and Charles Wyplosz (1994) report flows that imply that 0.3 percent of the employed workers switch directly from one job to another, 0.8 percent