What are some of the possible ways in which we could reduce the natural rate of unemployment?

Answer 1

The most promising approaches have to do with education, training, and job placement. The data clearly show that more educated workers are unemployed less frequently than less educated ones are. Vocational training and retraining programs, if successful, help unemployed workers with obsolete skills acquire abilities that are currently in demand. By so doing, they both raise employment and help alleviate upward pressures on wages in jobs where qualified workers are in short supply. Government and private job placement and counseling services play a similar role. Such programs try to match workers to jobs better by funneling information from prospective employers to prospective employees.