Ekman
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Re: 2015 HSC Economics Marathon
Conversely, an increase in the retirement age will cause those retirees to go back into the labour force, and we know that one of the costs of unemployment, especially long-term, is the loss of skills. So this loss of skills will allow them to be considered as structurally unemployed, hence increasing the NAIRU
Well the reasoning behind it is this: People who are aged close to the retirement age are usually people who are structurally or long term unemployed. So a decrease in the retirement age will cause these people who are structurally and long term unemployed to just retire, resulting in them to be no longer considered in the NAIRU figures as they are no longer unemployed. So this will cause the NAIRU to decrease.Oops, meant retirement age, bad typo.
Conversely, an increase in the retirement age will cause those retirees to go back into the labour force, and we know that one of the costs of unemployment, especially long-term, is the loss of skills. So this loss of skills will allow them to be considered as structurally unemployed, hence increasing the NAIRU