Pearse Doherty (Donegal South West, Sinn Fein)
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306. To ask the Minister for Finance the estimated nominal non-accelerating wage rate of unemployment and the percentage non-accelerating wage rate of unemployment of the labour force used in the 2015 stability programme update. [20648/15]

Michael Noonan (Limerick City, Fine Gael)
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The non-accelerating wage rate of unemployment or NAWRU is the concept of structural unemployment used within the harmonised framework for estimating potential output used by the European Commission. The rate of structural unemployment is not observed and must be estimated empirically.

The NAWRU estimates consistent with the 2015 Stability Programme Update indicate a rate of structural unemployment falling from just over 10 per cent in 2015 to just under 6½ per cent by 2020.

Notwithstanding improvements negotiated at technical level last year in how the NAWRU is estimated for Ireland, estimates of the NAWRU using this harmonised methodology remain unsatisfactory to the extent that they continue to be overly pro-cyclical - in other words, estimated structural unemployment closely follows the path of actual unemployment.