Policy function calculation from value function iterations

We consider the following mixed m-state model with leisure utility:

.

.

.

where

and

.

.

.

and

.

.

.

Each constant labor can be computed from

and

for state 1

and

for state 2

and

for state 3

.

.

.

and

for state m

respectively beforehand. We here change both theta’s and h’s.