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2019 OECD ECONOMIC
SURVEY OF FRANCE
Towards more inclusive growth and employment
Paris, 9 April 2019
@OCDE
@OECDeconomy
2
Main themes
Labour market performance and implementation of the OECD Jobs Strategy
Key long-term challenges
France’s assets and reform agenda
Efficiency of public investment
Growth is resilient, but insufficient
France’s assets and reform agenda
3
4
France’s productivity is high
GDP per hour worked, levelCurrent USD PPPs, 2017
Source: OECD (2019), OECD Productivity Statistics (database).
0
10
20
30
40
50
60
70
80
90
0
10
20
30
40
50
60
70
80
90
HU
N
KO
R
PO
L
GR
C
PR
T
CZ
E
NZ
L
SV
K
JPN
CA
N
OE
CD
ES
P
ITA
AU
S
GB
R
EA
19
ISL
FIN
FR
A
SW
E
CH
E
NLD
US
A
DE
U
AU
T
DN
K
BE
L
NO
R
5
Health-adjusted life expectancy is high
1. Average number of years that a new-born infant can expect to live in full health. 2. Euro area member countries that are also members of the OECD (17 countries).Source: WHO (2019), Global Health Observatory data repository , World Health Organisation, Geneva.
Years, 2016¹
6
The ongoing reform agenda is
ambitious
GDP per
capita
2017-18 labour market reforms 1.4
- Higher targeted spending on lifelong learning, increased
flexibility of employment protection, lower administrative extension
of branch-level agreements.
Tax measures 1.4
- Reduced tax wedge, reduction of capital income taxation,
steady increase in in-work benefits.
Product market and simplification measures 0.4
- Simplification of bankruptcy procedures, smoothing of firm-size
related thresholds and incentives for employee-participation
schemes.
Total 3.2
Source : OECD Staff calculations and De Williencourt, C, Faci, A. et S. Ray (2018), « Quel effet macroéconomique du PACTE ? Premiers éléments de réponse », Trésor-Eco, No. 226.
Potential impact of some ongoing reforms
GDP per capita after 10 years (%)
7
Reforms will benefit lower- and middle-
income households
Illustrative increases in disposable income over the long term
By income groups, %
Source: OECD Staff calculations and De Williencourt, C, Faci, A. et S. Ray (2018), « Quel effet macroéconomique du PACTE ? Premiers éléments de réponse », Trésor-Eco, No. 226.
-1
0
1
2
3
4
5
6
7
8
9
-1
0
1
2
3
4
5
6
7
8
9
The poor Lower middle-class Mean Upper middle class The rich
Product market and simplification measures² Tax measures
2017-18 labour market reforms Total effects
Growth is resilient, but insufficient
to significantly improve living
standards
8
9
Economic growth is resilient
1. Euro area member countries that are also members of the OECD (17 countries).Source: OECD (2019), OECD Economic Outlook: Statistics and Projections (database) and updates.
Real GDP growth, annual growth (%)
-6
-4
-2
0
2
4
6
-6
-4
-2
0
2
4
6
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
FRANCE Euro area¹ United States
10
The rise in living standards is lagging
behind that in the euro area
Real GDP per capita¹
Index, 2001-Q1=100
1. At constant 2010 USD PPPs.
Source: OECD (2019), OECD National Accounts Statistics (database).
95
100
105
110
115
120
125
95
100
105
110
115
120
125
2001 2003 2005 2007 2009 2011 2013 2015 2017
FRANCE Germany
Euro area (19 countries) United States
11
Growth in disposable income has stagnated
1. Changes in household incomes, after taxes and social contributions, and deflated by the consumer price index. Household composition takes into account consumption units (number of adults, number of children and their age).
Source: INSEE (2019), Pouvoir d'achat et ratios des comptes des ménages.
Disposable income of French households¹
Index, 2001-Q1=100
95
100
105
110
115
120
125
130
95
100
105
110
115
120
125
130
2001 2003 2005 2007 2009 2011 2013 2015 2017
Disposable income Disposable income adjusted by household composition
12
Public debt has not decreased
Public debt¹
% of GDP
1. According to Maastricht definition. Euro area member countries that are also members of the OECD (17 countries).Source: OECD (2019), OECD Economic Outlook: Statistics and Projections (database) and updates.
50
60
70
80
90
100
110
120
130
140
50
60
70
80
90
100
110
120
130
140
2001 2003 2005 2007 2009 2011 2013 2015 2017
FRANCE Germany Euro area¹ Portugal
13
Operating expenditures are high
1. Total spending excluding interest payments and public investment.
OECD (2019), OECD Economic Outlook: Statistics and Projections (database) and updates.
Operating expenditures1
In percent of GDP, 2017
0
10
20
30
40
50
60
0
10
20
30
40
50
60
IRL
KO
R
LTU
US
A
NZ
L
AU
S
LV
A
JPN
CA
N
ES
T
CZ
E
SV
K
PO
L
ISL
ES
P
OE
CD
SV
N
NLD
LU
X
HU
N
PR
T
DE
U
ITA
AU
T
NO
R
DN
K
BE
L
FIN
FR
A
14
Pension spending is high
Source: European Commission (2018), "The 2018 Ageing Report”, Brussels.
Public spending on pension, 2016
Percent of GDP
0
2
4
6
8
10
12
14
16
18
0
2
4
6
8
10
12
14
16
18
IRL
LTU
NLD
LV
A
GB
R
ES
T
SW
E
CZ
E
SV
K
LU
X
HU
N
DN
K
DE
U
NO
R
SV
N
PO
L
EU
28
BE
L
ES
P
EA
19
FIN
PR
T
AU
T
FR
A
ITA
GR
C
As part of the “Action Publique 2022” programme, announce
precise targets for reducing public expenditures in spending
reviews.
Systematically review tax expenditures after some years of
implementation and phase them out if not deemed helpful.
Review pension penalties and bonuses to encourage an
increase in the effective retirement age and gradual
retirement.
15
Main recommendations to reduce public
spending and taxes
Key long-term challenges for
productivity and inclusiveness
16
17
Well-being indicators are mixed
1. Each well-being dimension is measured by one to four indicators from the OECD Better Life Index set. Normalised indicators are averaged with equal weights.
Source : OECD (2017), Better life index, www.oecdbetterlifeindex.org.
Country rankings, 2017
from 1 (best) to 35 (worse)¹
3
1315 15
18 1921 22 23
2426
Work-lifebalance
Civicengagement
Housing Income andwealth
Health status Personalsecurity
Environmentalquality
Jobs andearnings
Subjectivewell-being
Education andskills
Socialconnections
20% bottom performers 60% middle performers 20% top performers France
18
Productivity gains are limited
1. At constant 2010 USD PPPs.Source : OECD (2018), OECD Productivity Statistics (database).
GDP per hour worked
Average annual % growth rate¹, 1997-2017
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
ITA
GR
C
ES
P
BE
L
NO
R
NZ
L
CH
E
PR
T
DN
K
FRA
NLD
GB
R
DE
U
CA
N
JPN
AU
S
AU
T
FIN
SW
E
US
A
EA
19
OE
CD
ISL
HU
N
CZ
E
SV
K
PO
L
KO
R
19
Poverty is low thanks to social
transfers…Poverty rate
% of the population aged 18-65, 20161
1. At 50% of households’ median equivalised income. 2016 or latest year available.2. Euro area member countries that are also members of the OECD (17 countries).
Source: OECD (2019), OECD Income Distribution and Poverty Statistics (database).
0
5
10
15
20
25
30
0
5
10
15
20
25
30
ISL
DNK
CZE
FIN
NOR
FRA
NLD
SVK
SWE
CHE
BEL
AUT
DEU
HUN
POL
NZL
GBR EA
²
OEC
D
AUS
CAN
PRT
ITA
KOR
GRC ES
P
JPN
USA
Poverty rate after taxes and transfers Poverty rate before taxes and transfers
20
… but intergenerational mobility is
weak
1. Expected number of generations it would take the offspring from a family at the bottom 10% to reach the mean income in society. Available countries for the OECD average and euro area member countries that are also members of the OECD.Source : OCDE (2018), A Broken Social Elevator? How to Promote Social Mobility.
Number of generations to reach mean income1
0
1
2
3
4
5
6
7
0
1
2
3
4
5
6
7
DN
K
NO
R
SW
E
FIN
NZ
L
CA
N
AU
S
NLD JP
N
BE
L
ES
P
GR
C
OE
CD
¹
EA
¹
CH
E
KO
R
US
A
GB
R
AU
T
PR
T
ITA
DE
U
FRA
HU
N
21
Main recommendations to enhance
well-being and productivity
Continue reforms by minimising and/or offsetting their potential short-
term negative effects on selected population groups
Fostering greener growth
Increase environmental taxes and develop flanking measures for the
most affected populations over the short term.
Strengthen the risk assessment of phytosanitary products.
Fostering greener growth
Engage an independent institution to conduct a thorough review of all
existing and proposed regulations affecting firms.
Lower transaction costs on housing, notably real estate transfer taxes.
Fostering an inclusive development
of skills and employment
Implementing the OECD Jobs Strategy
22
23
Progress in the labour market remains
limited
% of the population % of the labour force
Employment and unemployment rates
Source: OCDE (2019), OECD Economic Outlook: Statistics and Projections (database) and updates.
0
2
4
6
8
10
12
50
52
54
56
58
60
62
64
1998 2002 2006 2010 2014 2018
Employment rate, 15-74 year-olds (left axis) Unemployment rate (right axis)
24
Significant reforms have been undertaken
25
Labour cost at the minimum wage has
decreased
Labour cost at the minimum wage% of the median’s labour cost, 2018¹
Source : OECD (2019), OECD Staff calculations based on the OECD’s TaxBEN model.
1. Including the amount of the CICE tax credit; estimates based on a household of one single person with no children.2. The 2019 estimates for France factor in the reforms of employers’ social security contributions which are taking place in 2019, but they do not take into account the planned increase in the minimum wage in 2019.
26
Recent tax and benefit reforms will help
low-income households
Simulated effects of reforms on the net minimum hourly incomeUSD-PPPs, 2018¹
1. The simulations are based on a household comprising a single individual without children. 2. The reforms considered correspond to the 2018 and 2019 tax and benefit reforms: the cut in employee social security
contributions; the reform of the in-work benefits (Prime d’activité) (including measures that came into force on 1 January 2019 – further rises to the Prime d’activité to increase net household income by 90 euros at the level of the minimum wage-). The increase in the minimum wage in 2019 is not considered. Data before reforms include the CICE.
Source : OCDE (2019), OECD Staff calculations using the OECD TaxBEN model.
0
2
4
6
8
10
12
14
0
2
4
6
8
10
12
14
HUN LVA SVK EST GRC POL PRT TUR CZE SVN ESP USA CAN DEU KOR JPN IRL GBR NZL FRA BEL AUS FRA LUX NLD
After reforms ²
Before reforms
27
Difficulties of dismissals for permanent
contracts have decreased
1. Provisional estimates for 2018.2. Rigidity of employment of employment protection for permanent contracts, sub-indicator of individual dismissals. The
assessed difficulties are: procedural inconveniences for employers engaging in a dismissal process, notice periods and severance pay in the case of fair dismissal and the permissible grounds for dismissal and the repercussions for the employer if a dismissal is found to be unfair.
Source : OECD (2019), OECD Staff calculations based on the OECD’s indicators of employment protection.
Strictness of protection for permanent contracts, difficulty of individual dismissals
Indicator scale from 0 (least restrictive) to 6 (most restrictive), 2013 et 20181,2
28
But structural weaknesses remain
29
Too many adults have weak skills
Source : OECD (2016), Skills Matter—Further results from the survey of adult skills. OECD skills surveys, OECD Publishing, Paris.
As a % of the population aged between 16 and 65, with a PIAAC score lower than 2
0
10
20
30
40
50
60
0
10
20
30
40
50
60
JPN
FIN
NLD
SV
K
CZ
E
BE
L
SW
E
ES
T
AU
T
DN
K
AU
S
DE
U
CA
N
OE
CD
GB
R
PO
L
IRL
US
A
SV
N
FRA
GR
C
ES
P
ITA
TUR
Numeracy only Literacy only Literacy and numeracy
30
Workplace integration of young people
with few qualifications is difficult
1. Employment rate of the 20 to 34 age group, among workers who completed their studies with a mid-level qualification (ISCED levels 3 and 4, general programme) or a high-level qualification (ISCED levels 5 to 8) before the survey, and who are not currently enrolled in any other education or training, either formal or informal.Source : Eurostat (2018), "Labour status of young people by years since completion of highest level of education", Eurostat database.
Employment rate of those leaving education¹
% of the population, 2017
0
10
20
30
40
50
60
70
80
90
100
0
10
20
30
40
50
60
70
80
90
100
GR
C
ITA
FRA
BE
L
TUR
ES
P
ES
T
FIN
EU
28
DE
U
AU
T
HU
N
LVA
CH
E
PO
L
SV
K
GB
R
IRL
LTU
PR
T
NLD
DN
K
SW
E
NO
R
LUX
CZ
E
Lower educated, general programme Tertiary educated
31
It is difficult to get a permanent contract
1. Probability over three years of transition from a temporary contract to permanent employment.2. Euro area member countries that are also members of the OECD, excluding Lithuania (16 countries).Source : OECD (2019), OECD Staff estimates and Eurostat data.
Transitions from temporary to permanent employment¹% of employees with temporary contracts, 15-64 years old
0
10
20
30
40
50
60
70
80
90
100
0
10
20
30
40
50
60
70
80
90
100
FRA
NLD
GR
C
PO
L
ES
P
PR
T
ITA
CZ
E
EA
²
BE
L
FIN
LUX
DE
U
SV
N
SW
E
HU
N
SV
K
IRL
AU
T
LVA
ES
T
Strengthening job quantity and quality
Mainly focus employer labour tax exemptions on low wages.
Restrict the possibility of receiving unemployment benefits during
repeated periods of temporary employment and the reloading of
rights over short employment spells.
Modulate labour costs to reduce the excessive use of short-term
contracts.
Strengthen apprenticeship in secondary vocational schools, and
social and economic integration programs for inactive youth.
32
Main recommandations for an inclusive
development of skills and employment
Improving labour market inclusiveness
Merge welfare programmes and in-work benefits, taking into
account housing benefits and public housing in overall household
resources.
Speed up the development of additional childcare services for the
poorest households and in poor neighbourhoods.
Stimulating labour market adaptability and resilience
Promote access to vocational training for the least qualified.
Ensure access to transparent information and effective monitoring of
the quality of lifelong learning programmes through additional
evaluations and counselling.
Encourage a more flexible rental market by developing shorter
contracts and the use of rental guarantees.
33
Main recommandations for an inclusive
development of skills and employment
Improving the efficiency of public
investment
34
35
The stock of public capital is large
Source : IMF (2017), Investment and Capital Stock Statistics (database).
Capital stock as a percentage of GDP, 2015
0
20
40
60
80
100
120
0
20
40
60
80
100
120
AU
S
LV
A
IRL
SV
K
HU
N
PO
L
DE
U
GB
R
BE
L
CZ
E
CA
N
ES
T
CH
E
OC
DE
KO
R
AU
T
SV
N
US
A
ES
P
ITA
NL
D
SW
E
FR
A
PR
T
GR
C
FIN
DN
K
LU
X
JPN
36
The quality of infrastructure is high…
World Economic Forum index¹, 2017
1. Index from the lowest perceived quality (0) to the highest (7); the score is based on the assessment of business leaders operating in the country in response to the question: "How do you assess the general state of infrastructure (e.g. transport, communications and energy) in your country?”.
Source : WEF (2018), The Global Competitiveness Report 2017-18 (database), World Economic Forum, Geneva.
0
1
2
3
4
5
6
7
0
1
2
3
4
5
6
7
SV
K
PO
L
LV
A
ITA
GR
C
IRL
HU
N
SV
N
CZ
E
AU
S
BE
L
GB
R
OE
CD
CA
N
ES
T
ES
P
LU
X
SW
E
KO
R
PR
T
DE
U
DN
K
US
A
AU
T
FR
A
FIN
JPN
NL
D
CH
E
37
… but investing in maintenance is necessary
Maintenance as a share of total rail investment spending
Percent
Source : ITF (2018), Inland Freight Transport (base de données), International Transport Forum, Paris.
0
10
20
30
40
50
60
70
0
10
20
30
40
50
60
70
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
38
Investing for the future
39
Greener transport modes can be developed
1. Or latest year available.2. Unweighted average for 2015, computed excluding Belgium, Iceland and Israel, for which data are unavailable or incomplete.3. Total inland freight transport excludes pipelines.Source : ITF (2018), Inland Freight Transport (base de données), International Transport Forum, Paris.
Rail freight market share
As a percent of total inland freight transport, 20171
0
10
20
30
40
50
60
70
0
10
20
30
40
50
60
70
IRL
GR
C
ES
P
KO
R
NLD
PR
T
JPN
GB
R
PO
L
NO
R
DN
K
FRA
ITA
HU
N
SV
K
DE
U
OE
CD
²
CZ
E
FIN
ES
T
SW
E
CH
E
CA
N
US
A³
AU
T
LVA
AU
S
SV
N
40
There is room to improve research performance
1. Share of the scientific output of domestic research institutions that is included in the set of the 10% most cited papers in their respective scientific fields, fractional counts.
2. Or latest year available.Source : OECD (2017), OECD Science, Technology and Industry Scoreboard 2017, OECD Publishing, Paris.
Share of international top publications1
% of publications among the 10% most cited, 20152
0
2
4
6
8
10
12
14
16
0
2
4
6
8
10
12
14
16
SV
K
HU
N
CZ
E
PO
L
SV
N
JPN
KO
R
GR
C
LVA
PR
T
ES
P
OE
CD
ES
T
FRA
IRL
AU
T
FIN
CA
N
DE
U
SW
E
AU
S
ITA
BE
L
GB
R
US
A
DN
K
NLD
CH
E
Strengthen socio-economic efficiency considerations in the selection of large
projects.
Increase the share of infrastructure maintenance spending in public investment.
Give a stronger role to standard unit cost approaches in setting
intergovernmental transfers.
Increase horizontal equalisation transfers between local governments to better
address territorial disparities.
Promote distance-based and congestion charges to develop alternative
transport modes.
Continue to increase universities’ autonomy to define their programmes and
manage their staff.
Continue to increase the budget of the National Research Agency.
41
Main recommendations to improve the
efficiency of public investment
For more information
Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of
the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries
and to the name of any territory, city or area.
42
http://www.oecd.org/eco/surveys/france-economic-snapshot
@OECDeconomy
@OECD
