The Surprising French Employment Performance: What Lessons?
AbstractAlthough widely regarded as a textbook case of a rigid economy, in the late 1990s France was able to increase employment by 10 per cent within five years and to cut down unemployment by more than a fourth. This paper investigates what factors may account for this surprising performance. The evidence suggests a significant shift in the demand for labour, that can be partially ascribed to cuts in social security contributions introduced in the 1990s and to the later move to a 35 hours work week. Although a large proportion of companies reported difficulties in hiring, the sharp reduction in unemployment did not result in significant wage pressure. Nevertheless, new measures aiming at fostering labour supply were introduced in the early 2000s. The emphasis on stimulating labour demand that characterised French labour market policies in the 1990s was more successful than expected by observers. This lends support to the advocates of active labour market policies. However, the budgetary cost of this approach has also been high. Whether this strategy is sustainable in the medium run is likely to become increasingly an issue.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1078.
Date of creation: 2003
Date of revision:
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Éric Heyer & Xavier Timbeau, 2000.
"35 heures : réduction réduite,"
Revue de l'OFCE,
Programme National Persée, vol. 74(1), pages 53-95.
- O Blanchard & A Landier, 2002. "The Perverse Effects of Partial Labour Market Reform: fixed--Term Contracts in France," Economic Journal, Royal Economic Society, vol. 112(480), pages F214-F244, June.
- Blanchard, Olivier & Wolfers, Justin, 2000.
"The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence,"
Royal Economic Society, vol. 110(462), pages C1-33, March.
- Olivier Blanchard & Justin Wolfers, 1999. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," NBER Working Papers 7282, National Bureau of Economic Research, Inc.
- Bernard Salanié & Guy Laroque, 2000. "Une décomposition du non-emploi en France," Économie et Statistique, Programme National Persée, vol. 331(1), pages 47-66.
- Gurgand, M. & Margolis, D., 2001.
"RMI et revenus du travail : une evaluation des gains financiers a l'emploi,"
Dossiers de recherche-
09, Centre d'etudes de l'emploi.
- Marc Gurgand & David Margolis, 2001. "RMI et revenus du travail : une évaluation des gains financiers à l'emploi," Économie et Statistique, Programme National Persée, vol. 346(1), pages 103-122.
- Johanna Melka & Nanno Mulder & Laurence Nayman & Soledad Zignago, 2003. "Skills, Technology and Growth is ICT the Key to Success ? An Analysis of ICT Impact on French Growth," Working Papers 2003-04, CEPII research center.
- repec:ner:sciepo:info:hdl:2441/4782 is not listed on IDEAS
- David N. Margolis, 2002. "Licenciements collectifs et délais de reprise d'emploi," Économie et Statistique, Programme National Persée, vol. 351(1), pages 65-85.
- Olivier J. Blanchard & Jean-Paul Fitoussi, 1998. "Croissance et chômage," Sciences Po publications info:hdl:2441/4782, Sciences Po.
- repec:fth:inseep:2000-01 is not listed on IDEAS
- Casadio, Paolo & Paradiso, Antonio & Rao, B. Bhaskara, 2012. "Estimates of the steady state growth rates for some European countries," Economic Modelling, Elsevier, vol. 29(4), pages 1119-1125.
- Eichhorst, Werner & Marx, Paul, 2010. "Whatever Works: Dualisation and the Service Economy in Bismarckian Welfare States," IZA Discussion Papers 5035, Institute for the Study of Labor (IZA).
- Bassanetti, Antonio & Döpke, Jörg & Torrini, Roberto & Zizza, Roberta, 2006. "Capital, labour and productivity: What role do they play in the potential GPD weakness of France, Germany and Italy?," Discussion Paper Series 1: Economic Studies 2006,09, Deutsche Bundesbank, Research Centre.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
If references are entirely missing, you can add them using this form.