France 2015 main findings growth and jobs

1. www.oecd.org/economy/surveys/economic-survey-france.htm
OECD
OECD Economics
2015 OECD ECONOMIC
SURVEY OF FRANCE
Growth and jobs
Paris, 2 April 2015

2. 2

3. 3
Well-being is high
http://dx.doi.org/10.1787/888933192276
Source : OECD (2014), OECD Better Life Index , www.oecdbetterlifeindex.org.
Better life index, 2014
Index scale of 0 to 10, from lowest to highest level of life quality
0
1
2
3
4
5
6
7
8
9
10
Income and wealth
Jobs and earnings
Housing
Work and life balance
Health status
Education and skillsSocial connections
Civic engagement and
governance
Environmental quality
Personal security
Subjective well-being
France
OECD

4. Income inequality is moderate
4http://dx.doi.org/10.1787/888933192276
1. Latest available year.
Source: OECD, Income Distribution and Poverty Database.
0
5
10
15
20
25
30
35
40
45
0
5
10
15
20
25
30
35
40
45
NOR DNK CZE FIN BEL SWE NLD AUT DEU IRL POL FRA KOR CAN ITA NZL AUS GRC PRT ESP GBR USA
Gini index after taxes and transfers, per cent¹

5. But per capita growth has been weak for some time (I)
5http://dx.doi.org/10.1787/888933192276
Source : OECD, National Accounts and Economic Outlook 96 Databases .
0
1
2
3
4
5
0
1
2
3
4
5
ITA FRA GRC DNK PRT BEL FIN ESP CAN DEU NLD USA AUT NZL SWE CZE NOR GBR AUS IRL POL KOR
Annualised real per capita GDP growth, 1990-2014% %

6. But per capita growth has been weak for some time (II)
6
Source : OECD, National Accounts and Economic Outlook 96 Databases .
-5
-4
-3
-2
-1
0
1
2
3
4
5
1990 1994 1998 2002 2006 2010 2014
France
OECD
Annual % change
90
100
110
120
130
140
1990 1994 1998 2002 2006 2010 2014
France
OECD
Index, 1990=100
Real per capita GDP growth

7. And unemployment is still high, especially for youths
7
Source: INSEE.
0
4
8
12
16
20
24
28
0
4
8
12
16
20
24
28
2000 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Unemployment rate
Total Youths (15-24)
As a percentage of the labour force As a percentage of the labour force
http://dx.doi.org/10.1787/888933192282

8. Main findings
8
o Boosting medium-term growth will require continuing and deepening
structural reforms.
o High public spending has led to high taxes, including on labour.
o The labour market remains inflexible.
o The low-skilled and unemployed lack training opportunities.
o Weak competition, notably in some services sectors, hurts growth.

9. Key recommendations
9
o Implement additional structural reforms to improve the outlook for growth.
o Make targeted reductions in public spending to cut taxes in the medium term.
o Redouble efforts to reduce complexity, notably of the labour code and lay-off
procedures.
o Improve the quality of vocational education, concentrating it on the neediest.
o Move faster to eliminate economic rents and privileges to boost employment,
equity and competition.

10. The challenges

11. Activity continues to stagnate
11
http://dx.doi.org/10.1787/888933192282
Source: OECD, Economic Outlook 96 Database (and updates).
-8
-6
-4
-2
0
2
4
6
8
-8
-6
-4
-2
0
2
4
6
8
2008 2009 2010 2011 2012 2013 2014
Real GDP growth
Year-on-year percentage change
France Germany United Kingdom United States

12. Business investment is weak
12
http://dx.doi.org/10.1787/888933192282
Source: OECD, Economic Outlook 96 Database (and updates) .
-20
-15
-10
-5
0
5
10
15
-20
-15
-10
-5
0
5
10
15
2008 2009 2010 2011 2012 2013 2014
Business investment
Year-on-year percentage change, volume
France Germany United States

13. Export performance has not improved
13
1. Difference between export growth and export market growth, in volume terms.
Source: OECD, Economic Outlook 96 Database (and updates) .
-4
-3
-2
-1
0
1
2
3
90
100
110
120
130
140
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Export market shares and the current account balance
Export performance¹ (left axis) Current account balance (right axis)
Index 2010=100 As a percentage of GDP
http://dx.doi.org/10.1787/888933192282

14. Public debt is still rising
14
http://dx.doi.org/10.1787/888933192324
1
Source: OECD, Economic Outlook 96 Database (and updates) .
20
30
40
50
60
70
80
90
100
0
1
2
3
4
5
6
7
8
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Public deficit and debt, 1990-2014
As a percentage of GDP
General government deficit (left axis)
General government debt, Maastricht definition (right axis)

15. 15
To address these challenges,
speed up the pursuit and
implementation of ambitious
structural reforms

16. Full implementation of structural reforms will pay off
16Source : OECD (2014), France, Les réformes structurelles : impact sur la croissance et options pour l'avenir,
OECD Publishing.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2020 2025
Impact of major structural reforms engaged
between 2012 and October 2014
Impact on GDP (%)
Reforms engaged
Reforms announced

17. Make green growth a priority
17
http://dx.doi.org/10.1787/888933192487
 Raise
environmental
taxes, notably on
diesel, to reduce
pollution
Source : OECD, Environmental Taxation Database.
1. 2011 for Belgium, Greece and the Netherlands; environmental taxes cover taxes on energy
products (including electricity, petrol, diesel and other fossil fuels), automotive vehicles, transportation,
waste management, substances that deplete the ozone layer, and other environment-related taxes.
0
1
2
3
4
5
0
1
2
3
4
5
USA
CAN
OECD
ESP
SVK
FRA
CHE
POL
BEL
DEU
PRT
IRL
GBR
SWE
AUT
EST
GRC
CZE
HUN
ITA
FIN
NLD
DNK
SVN
Environment-related tax revenues, 2012¹
As a percentage of GDP

18. Lower public spending substantially
in the medium term

19. Focus budgetary consolidation on public spending
19
http://dx.doi.org/10.1787/888933192332
Source: OECD, Economic Outlook 96 Database .
0
10
20
30
40
50
60
0
10
20
30
40
50
60
KOR
CHE
AUS
IRL
USA
EST
CAN
SVK
ISR
POL
CZE
NZL
JPN
ESP
GBR
LUX
DEU
ISL
NLD
NOR
GRC
SVN
EU15
HUN
PRT
AUT
ITA
BEL
SWE
DNK
FRA
FIN
Government spending
2014, as a percentage of GDP

20. High spending means high taxes
20
http://dx.doi.org/10.1787/888933192342
Source: OECD, Revenue Statistics Database.
30
35
40
45
50
55
30
35
40
45
50
55
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Trends in tax revenues
As a percentage of GDP
France Germany Sweden Canada

21. The share of public employment is high
21
 Ensure the
number of civil
servants matches
underlying needs
 Reform the job
mobility rules for
public employees
http://dx.doi.org/10.1787/888933192332
C
JP
G
M
N
K
D
N
A
P
A
C
Source: OECD, Economic Outlook 96 Database.
0
5
10
15
20
25
30
35
0
5
10
15
20
25
30
35
CHE
JPN
GRC
MEX
NLD
KOR
DEU
NZL
AUS
PRT
AUT
CZE
IRL
TUR
ITA
USA
SVK
POL
LUX
ESP
GBR
EU15
SVN
BEL
CAN
HUN
FRA
EST
ISL
FIN
SWE
DNK
NOR
Share of government employment
2014, as a percentageof total employment

22. Better control local government operating spending
22
 Reduce the number of
local governments and
strengthen the role of
“intercommunalités”
 Rationalise the
allocation of
responsibilities among
all levels of public
administration
 Eliminate all “general
competence” clauses
http://dx.doi.org/10.1787/888933192332
Source: INSEE.
0
1
2
3
4
5
6
7
0
1
2
3
4
5
6
7
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Local government spending
As a percentage of GDP
Operating spending
Investment spending

23. Better control social spending (I)
23
http://dx.doi.org/10.1787/888933192363
Source: OECD, Social Expenditure Database.
0
5
10
15
20
25
30
35
0
5
10
15
20
25
30
35
MEX
CHL
KOR
TUR
ISR
EST
ISL
CAN
SVK
AUS
USA
CHE
CZE
POL
NZL
IRL
OECD
GBR
NOR
HUN
JPN
LUX
SVN
GRC
NLD
PRT
DEU
ESP
SWE
AUT
ITA
DNK
BEL
FIN
FRA
Government social spending
2014, as a percentage of GDP

24. Better control social spending (II)
 Hold down health-care spending:
 Close small, under-utilised public hospitals,
 Continue making greater use of ambulatory surgery and generic
drugs,
 Encourage doctors more to limit their prescriptions.
 Ensure that public pensions play their part in reducing public
spending as a share of GDP:
 Modify the parameters of complementary pension schemes,
 Narrow further the specific features of special pension regimes.
 Modify the parameters of unemployment benefits:
 Plan to reduce their maximum duration when growth picks up,
 Tighten their conditionality on effective job search or training.
24

25. Reform the labour market

26. Restrain labour market duality
26http://dx.doi.org/10.1787/888933192402
 Simplify and shorten layoff
procedures, for example by
reforming the labour courts
 Improve training and
guidance (see below)
Source: OECD (2014), Labour Force Statistics Database.
0
10
20
30
40
50
60
70
80
AUS
GBR
DNK
NOR
OECD
JPN
GRC
CZE
CAN
BEL
IRL
AUT
FIN
ITA
DEU
NLD
SWE
FRA
PRT
ESP
POL
SVN
B. Youths (15-24)
0
5
10
15
20
25
30
AUS
GBR
BEL
NOR
DNK
AUT
CZE
GRC
IRL
OECD
ITA
CAN
DEU
JPN
FIN
SVN
FRA
SWE
NLD
PRT
ESP
POL
A. Total
Share of employment under fixed-term contracts
As a percentage of total dependent employment, 2013

27. Lower further the tax wedge and the overall
cost of labour
27
http://dx.doi.org/10.1787/888933192393
 Shrink the tax wedge
in line with public
spending cuts
 Avoid any
discretionary increase
in the minimum wage
Source : OECD, Taxing Wages 2014 .
1. Including employer contributions. The measures of the fiscal and social wedge are computed
by assuming that the CICE tax credit would ease the same wedge by 4% of the gross salary, for
wages lower than 2.5 times the minimum wage (SMIC).
0
10
20
30
40
50
60
0
10
20
30
40
50
60
IRL
CAN
USA
GBR
OECD
NLD
DNK
EST
ESP
SVK
PRT
GRC
SVN
SWE
FIN
ITA
FRA
AUT
DEU
BEL
The tax wedge, 2013
Assessed at 100% of average wage, as a % of total remuneration for work¹

28. Strengthen vocational education and
training for those who need it most
28
 Implement a system of
quality assurance
 Ensure that the regions have
the capacity and funding
needed to guide candidates
 Clarify the responsibilities of
the parties involved and align
them with control over funds
http://dx.doi.org/10.1787/888933192492
Source : OECD (2013), Skills Outlook 2013 Database.
0
10
20
30
40
50
60
0
10
20
30
40
50
60
Low Medium High Low Medium High
Adults' proficiency, 2013
France
OECD
Numeracy Literacy
% %

29. Develop apprenticeships as from high school
29
http://dx.doi.org/10.1787/888933192439
 Attract highly qualified
teachers
 Give them credit for
professional experience
outside of teaching
 Provide more individualised
support for students in
difficulty
 Ensure business mentors
have pedagogical training
Source: Ministry of National Education, DEPP.
0
50
100
150
200
250
300
350
400
450
0
50
100
150
200
250
300
350
400
450
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Number of apprentices by level of diploma, thousands
Secondary education, short programmes
Secondary education, long programmes
Tertiary education

30. Strengthen competition
30

31. Continue to simplify the business environment
31
 Implement the measures
proposed by the business
simplification committee
 Charge an independent
institution with the task of
examining all regulations
http://dx.doi.org/10.1787/888933192453
1. 2008 for the United States.
Source: OECD (2013), Product Market Regulation Statistics.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
CAN
NZL
USA
GBR
AUS
DEU
DNK
JPN
CHL
FIN
NLD
NOR
IRL
CHE
SWE
ITA
EST
SVK
ISR
ESP
AUT
CZE
ISL
KOR
GRC
PRT
FRA
SVN
BEL
HUN
Administrative barriers to starting up corporations, 2013¹
From most (0) to least (6) favourable to competition

32. Further reduce barriers to competition in retail trade
32
 Simplify approval procedures
to open large stores
 End restrictions on loss-
leader selling and the dates
of discount sales
 Liberalise shop opening
hours while guaranteeing
negotiated offsets
http://dx.doi.org/10.1787/888933192748
1. 2008 for the United States.
Source : OECD (2013), Product Market Regulation Statistics .
0
1
2
3
4
5
6
0
1
2
3
4
5
6
SWE
SVN
KOR
NZL
NLD
CHL
CHE
AUS
ISL
EST
IRL
CZE
DNK
GBR
PRT
NOR
HUN
SVK
JPN
AUT
CAN
GRC
FRA
DEU
FIN
ESP
ITA
ISR
BEL
Regulations in the retail trade sector
Index scale from 0 to 6, from least to most restrictive
2013¹ 1998

33. Continue to open regulated professions to competition
33
http://dx.doi.org/10.1787/888933192463
 Limit the activities over which
they have an exclusive right
 End regulated prices in
potentially competitive sectors
 Gradually relax quotas
1. 2008 for the United States.
Source: OECD (2013), Product Market Regulation Statistics.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
SWE
FIN
CHE
CHL
DNK
GBR
AUS
NOR
USA
NZL
IRL
NLD
ISL
EST
ITA
ESP
JPN
SVK
GRC
AUT
KOR
CZE
ISR
SVN
PRT
DEU
FRA
BEL
HUN
CAN
Regulation of architectural, accounting and legal services,
2013¹
Index scale from 0 to 6, from least to most restrictive
Codes of conduct
Barriers to entry

34. More information…
www.oecd.org/economy/surveys/economic-survey-france.htm
OECD
OECD Economics
34
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