What can cause the NRU to increase?

What can cause the NRU to increase?

A. The presence of Unemployment Benefits

Unemployment benefits are payments made by governments to unemployed people.
Unemployment benefits increases frictional unemployment (and therefore NRU) by decreasing the opportunity cost of unemployment, thereby increasing the lowest wage that the job seeker would be willing to accept and lengthening the job search. (reduces f)
So public policies like these have an impact on the natural rate of unemployment. (this as you will see is not the only public policy that affects the NRU)

Note that unemployment benefits increases the replacement ratio - Measures the ratio of the state benefits whilst out of work to average earnings in work
The more unemployment benefits given to a person out of work compared to his average earnings while at work i.e. an increase in the replacement ratio à lowers the opportunity cost of being unemployed and therefore lowers f.