France: Selected Issues

International Monetary Fund

No 2016/228, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper examines the causes and potential remedies for structural unemployment in France. Structural unemployment in France has long been elevated, and appears to have edged up further since the crisis. This reflects both demand and supply factors, including: high labor taxes, wage stickiness, a growing skill gap, hysteresis effects from the crisis years, a lengthy period of elevated economic uncertainty, inactivity traps created by the unemployment and welfare benefit systems, and demographic factors that have pushed up the labor force. The cyclical recovery is projected to bring down the unemployment rate only slowly. Reducing labor tax wedges can increase both output and employment.

Keywords: ISCR; CR; wage; bank; minimum wage; return on assets; equity price movement; EU bank; salary earner; bank income; funding cost; French bank; wage responsiveness; adaptation effort; Labor taxes; Unemployment; Global systemically important banks; Unemployment benefits; Employment; Global; Europe (search for similar items in EconPapers)
Pages: 68
Date: 2016-07-12
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