Bertrand Pluyaud
Nikki Kergozou
OECD Economic Surveys: France 2024
OECD Economic Surveys: France
Abstract
Policy action can help to revive productivity growth, which has been low over the past two decades. Business R&D spending has been consistently below the OECD average although tax support for private R&D is amongst the highest in the OECD. Building on France's dynamic innovation ecosystems and workforce with strong scientific and technical skills can help attract R&D spending from multinationals. Barriers to entry and regulations can be eased in some services sectors where they remain elevated and complex, restraining competition and innovation. The creation of a better-connected network of public employment services, coordinated by “France Travail”, can help to improve the functioning of the labour market. The unemployment rate for young people remains high. Better supporting young people who are furthest away from finding employment is key and implies focusing financial support for apprenticeships on young people with low skills and difficulties transitioning into the labour market on their own. Pursuing efforts to improve the provision of early childcare services could help support the employment rate of women.
Over the past two decades, productivity growth has been low, and in most years has fallen short of developments across OECD and European countries. Growth in GDP per hour worked has trended down since 2000, falling sharply in the manufacturing sector but easing only slightly in the services sector (Figure 3.1, Panels A and B). Weak trend productivity growth has been associated with the level and matching of skills, a slow diffusion of digital technology, low R&D efficiency and high regulatory barriers (Conseil National de Productivité, 2019[1]). In particular, after 2008, the reallocation of labour and capital towards the most productive firms slowed markedly, as some regulations hindered firm entry and growth, as well as more efficient resource allocation (David, Faquet and Rachiq, 2020[2]; Libert, 2017[3]). However, the 2019 Pacte law has since eased regulations for firm creation and growth (OECD, 2019[4]).
The slowdown in productivity has worsened since the COVID-19 pandemic, but this largely reflects temporary effects, including the strong performance of employment, where the unemployment rate declined to its lowest level in 15 years over 2022. Trend employment growth has been increasingly boosting potential growth in recent years (Figure 3.1, Panels C and D). Productivity per capita was 8.5 percentage points below its pre-COVID19 trend in the second quarter or 2023 (Devulder et al., 2024[5]). The strong increase in apprenticeships and the changing composition of the workforce, as some workers with lower productivity entered the labour market, are estimated to make up around a quarter of this difference (Devulder et al., 2024[5]). However, apprenticeships may increase human capital and support productivity over the medium term. Labour hoarding in the face of an economic slowdown perceived as temporary, is estimated to have lowered productivity per capita by 1.7 percentage points. Other temporary factors, such as rising energy prices affecting production costs and activity, may also have played a role (Conseil national de productivité, 2023[6]). Productivity growth should increase as these temporary factors ease.
While employment is close to historical highs, the employment rate remains below and the unemployment rate above the OECD average, and recent policy action aims to further support people in moving into jobs. Under the law on full employment (loi plein emploi), the government aims to achieve full employment and increase participation in the labour market by focusing support on those who are far from employment, including recipients of the minimum-income benefit RSA (revenu de solidarité active), workers with disabilities and young people. This is meant to boost the ambition of the public employment services in the face of difficult challenges, including bringing the long-term unemployed and older workers into employment. As part of these measures, the government aims to improve the efficiency of the public employment service and enhance its governance. This involves overhauling its range of services through measures such as turning Pôle Emploi into “France Travail” and creating a “network for employment” designed to promote better coordination between those involved in promoting employment and access to the labour market.
France has already taken significant policy action to foster productivity growth, including related to earlier OECD recommendations (Table 3.1). Nonetheless, scope for further policy action remains notably in the areas of education (chapter 5), supporting digitalisation and innovation policies and improving regulation and refining in the anti-corruption framework to support a strong business environment. Reforms in these areas could generate a further 2.3% of GDP growth per capita after 10 years (Box 3.1). The resulting stronger growth could be made more inclusive with efforts to move more people into better jobs, including better training and ongoing efforts to promote the employment of young people and women, with improvements in early childcare to support both women in their career choices and educational outcomes of young children.
Note: Panel A: OECD is the average of 31 countries and EU of 27 countries. Services sector is business sector services excluding real estate.
Source: OECD Productivity database; OECD Labour force statistics; OECD Economic Outlook: Statistics and Projections (database)
The estimated impact of some of the key structural reforms proposed in this Survey is calculated using historical relationships between reforms and growth in OECD countries (Table 3.2). These estimates assume a full and swift implementation of reforms.
Source: The estimate of the impact of more efficient tax incentives for R&D spending is based on B. Égert and P. Gal (2017), “The quantification of structural reforms in OECD countries: A new framework”, OECD Journal: Economic Studies, Vol. 2016/1. The impact of reducing regulation is estimated using Y. Guillemette and D. Turner (2021) “The long game: Fiscal outlooks to 2060 underline need for structural reform”, OECD Economic Policy Papers 29. The impact of increasing schools’ accountability is estimated based on B. Egert, C de la Maisonneuve and D. Turner (2023) “Quantifying the effect of policies to promote educational performance on macroeconomic productivity”, OECD Economics Department Working paper 1781.
While firms have increased their use of digital technologies, further progress, particularly in SMEs, would boost business productivity and support exports (Sorbe et al., 2019[7]) (Aghion et al., 2021[8]). Around 24% of large and 80% of small French firms have a very low or low digital intensity, (Figure 3.2, Panels A and B). Firms’ low uptake is reflected in both basic digital technologies, such as having an online presence and receiving orders through computer networks (e-commerce) and more advanced uses, such as purchasing cloud computing.
In small businesses, a lack of training among managers and employees are a barrier to taking-up digital technologies (Figure 3.2,Panel C). Access to high-speed broadband is high and relatively widespread and France aims to roll out fibre broadband across the nation by 2025, which will help reduce geographical inequalities. By the end of 2021, around 99% of premises were eligible for high-speed broadband (above 30 Mbit/s), essentially reaching the target of Plan France Très Haut Débit (France’s Very High-Speed Broadband Plan) to connect 100% of households by 2022. While already 68% of premises were eligible for subscribing to internet access through optical fibre, this share was only 51% in rural areas, although above 34% in the rest of Europe (France Stratégie, 2023[9]). Benefitting from funding from the Recovery and Resilience Programme (PNRR), France’s 2025 ambitions appear achievable, with the implementation of public initiative areas accelerating (France Stratégie, 2023[9]). However, the envisaged funding for routine maintenance appears to be insufficient (France Stratégie, 2023[9]).
Note: Panels A and B: Businesses with 10 persons employed or more. Small enterprises have 10 to 49 persons employed, medium enterprises have 50 to 249 persons employed, and large enterprises have 250 persons employed or more. Panel C: refers to training offered over the past 12 months, and data for 2021 except for Australia (2022); Colombia, Israel, New Zealand, and Switzerland (2020); and the United Kingdom (2019). Panel D: Data for 2023, except for Australia (2022); and Israel and the United Kingdom (2020).
Source: Eurostat Database on Digital Economy and Society; OECD (2024), ICT Access and Usage by Businesses (database).
The roll out of high-speed broadband has accelerated businesses’ uptake since 2020 (Figure 3.2, Panel D). The roll out of high-speed broadband and fibre have had increasingly positive effects on the value added of firms and employment (INRAE, 2023[10]). However, 41% of firms without fibre hesitate to switch. This is largely due to the cost of such a connection, but also due to a lack of awareness about eligibility and a lack of confidence in operators (Ifop, 2023[11]). Some firms also cite that offers are not easy to understand and there is no guarantee on the services offered (France Stratégie, 2023[9]). Improving the clarity of offers, in terms of tariffs and the services provided, as well as the indirect costs associated with installation, could support firms’ uptake (France Stratégie, 2023[9]).
Overall, France’s innovation performance is strong compared to other European countries, although it has been falling in recent years (European Commission, 2023[12]). The country scores highly on environmental innovation and cooperation with innovative SMEs. Nevertheless, although France provides one of the highest levels of support for private research and development (R&D) in the OECD, both business and gross R&D spending have been consistently below the OECD averages over the past two decades (OECD, 2022[13]; 2021[14]; 2023[15]). French businesses spent around 2.2% of GDP on R&D on average between 2015 and 2021, below spending in the average OECD country of 2.5% (OECD, 2023[15]). France also lags in aspects including non-R&D innovation spending, trademark and design applications and sales of innovative products (European Commission, 2023[12]). This partly reflects the sectoral composition of the economy, where the high- and especially the medium-high technology sectors are under-represented (OECD, 2021[16]).
In 2020, the government directly financed 0.1% of GDP and provided 0.3% of GDP in indirect support through R&D tax credits, which is high in international comparison (Figure 3.3). Combined, the government financed almost 28% of business R&D spending (OECD, 2023[15]).
Direct government funding and tax support for business expenditure on R&D, 2020
Source: OECD (2023) R&D Tax Incentive database.
Large tax expenditure to foster private R&D could be subjected to regular evaluations, and greater targeting to SMEs could be considered to generate higher returns (CAE, 2022[17]; OECD, 2021[16]). Around 60% of support to innovation is through a volume-based tax credit (credit d’impôt recherche, CIR) of 30% for spending up to EUR 100 million, and 5% thereafter (OECD, 2021[14]; CNEPI, 2021[18]). In 2018, SMEs received 34% of the CIR and 36% went to firms with over 5 000 employees (CNEPI, 2021[18]). Several evaluations highlight a significant impact of the CIR on very small businesses and SMEs, both in terms of R&D activities and their economic performance, but a limited effect on intermediate-sized or large firms (Bach et al., 2021[19]; CNEPI, 2021[18]; CPO, 2022[20]). For example, the number of patents varies from 1.2 and 0.8 per million euros of tax credit received for very small and SMEs compared to 0.5 for large firms (CAE, 2022[17]). While the effect of tax support for R&D has found to be stronger in SMEs than in large firms across several OECD countries, this was even more the case in France (OECD, 2020[21]). In addition, the time taken to recover the sums committed under R&D tax credit are long for small, young businesses (Kallenbach et al., 2018[22]), which tend to be more innovative. Lowering the ceiling of the CIR and increasing the subsidy rate could allow for SMEs to benefit more and increase the effectiveness of the measure on innovation and GDP growth. Such a change could bring the structure of the CIR closer to the schemes in the United Kingdom, which also have high tax incentives yet favour SMEs.
Other measures to support innovation target SMEs. The innovation tax credit, which totalled around 400 million euros in claims in 2021, supports SME’s expenditure on designing prototypes and testing for new products. The status of Young Innovative Companies (Jeunes Entreprises Innovantes, JEI), which provides social and fiscal benefits for startups meeting specific R&D intensity and growth criteria. Support for emerging players is another key component of the France 2030 plan, with a view to ensuring they receive at least half of the funding, which totals around EUR 54 billion euros over five years. Building on these dynamic innovation ecosystems and a workforce with strong scientific and technical skills can help attract R&D spending from multinationals.
While one goal of the research tax credit is to increase the attractiveness of France as a location for multinationals’ R&D spending, its effectiveness for this purpose over the last 15 years is not clear (Lhuillery et al., 2021[23]). R&D spending by international firms has not kept pace with that of French firms and the R&D spending of these same groups globally (CNEPI, 2021[18]).
France has overall competition-friendly product market regulations, although regulatory barriers remain in some services, potentially weighing on competitiveness and long-term growth (Figure 3.4). Since 2018, the authorities have simplified administrative and regulatory burdens and eased administrative requirements, aided by the implementation of an electronic one-stop shop for business registration. The authorities have also substantially eased barriers to entry in digital markets.
Note: Entry regulation refers to the regulations of new entrants to the profession. Conduct regulation refers to the regulation of the conduct of existing professionals.
Source: OECD (Forthcoming), Product Market Regulation indicators.
France’s most stringent regulations remain in the services sectors, which are complex and somewhat protect services firms from full competitive practices, with no simplification since 2018 (Figure 3.4, Panel B). Barriers to entry and controls on practice for architects and accountants are high, and while entry requirements for lawyers and real estate agents are more limited, controls on practice are relatively high, suggesting room for better balance between the control of quality and competition. Barriers in retail distribution and sales of medicines are also elevated, with the distribution of many over-the-counter drugs and tests still restricted to pharmacies. Easing regulations and administrative burdens could stimulate competition and innovation.
France’s insolvency regime is relatively efficient compared to OECD countries, although barriers to restructuring are around the OECD average (Figure 3.5) and have increased in recent years. Easing barriers would allow a more timely exit of non-viable companies and better allocation of capital, supporting business dynamism (Adalet McGowan, Andrews and Millot, 2017[24]; Adalet McGowan and Andrews, 2018[25]; André and Demmou, 2022[26]). France introduced an indefinite length of stay on assets in restructuring, which slows asset recovery, and new financing continues to have priority over both secured and unsecured creditors in the event of restructuring, which could adversely affect the long-term availability of credit and legal certainty (Adalet McGowan and Andrews, 2018[25]; André and Demmou, 2022[26]). The number of insolvencies in France returned to its pre-pandemic trend in 2023, after government support measures helped limit the number of insolvencies during the pandemic (OECD, 2023[27]). Continuing to streamline procedures will help to free up resources for new entrants to grow.
Barriers to firm restructuring, 2022, zero represents no barriers
Note: The more effective the insolvency regime, the lower the value of the indicators. .
Source: André and Demmou (2022[26]).
Effective anti-corruption frameworks support a strong business environment. Corruption and challenges in public sector integrity reduce economic efficiency, waste public resources and widen economic and social inequalities (OECD, 2017[28]). Corruption also undermines equality of opportunity and erodes trust in institutions, making the structural reforms more difficult to implement. France performs above the OECD and EU average on international indicators of domestic corruption, although below some other high-income countries, such as Germany and the United Kingdom (Figure 3.6).
Note: Panel B shows the point estimate and the margin of error. Panel D shows sector-based subcomponents of the “Control of Corruption” indicator by the Varieties of Democracy Project. Panel E summarises the overall assessment on the exchange of information in practice from peer reviews by the Global Forum on Transparency and Exchange of Information for Tax Purposes. Peer reviews assess member jurisdictions' ability to ensure the transparency of their legal entities and arrangements and to co-operate with other tax administrations in accordance with the internationally agreed standard. The figure shows results from the ongoing second round when available, otherwise first round results are displayed. Panel F shows ratings from the FATF peer reviews of each member to assess levels of implementation of the FATF Recommendations. The ratings reflect the extent to which a country's measures are effective against 11 immediate outcomes. "Investigation and prosecution¹" refers to money laundering. "Investigation and prosecution²" refers to terrorist financing.
Source: Transparency International; World Bank, Worldwide Governance Indicators; Varieties of Democracy Project, V-Dem Dataset v12; OECD Secretariat’s own calculation based on the materials from the Global Forum on Transparency and Exchange of Information for Tax Purposes; and OECD, Financial Action Task Force (FATF).
Fully implementing the recommendations in the Groupe d’États contre la corruption’s latest evaluation would help to more effectively prevent corruption amongst persons with top executive functions and members of law enforcement agencies (GRECO, 2022[29]; 2020[30]). In particular, as recommended in the 2021 Economic Survey, the members of the executive, including the President of the Republic, should regularly and publicly disclose which lobbyists they have met and what they discussed (GRECO, 2022[29]; 2020[30]; OECD, 2021[16]). In 2022 the French Anti-Corruption Agency (Agence Française Anticorruption, AFA) was commissioned to develop a new anti-corruption plan for 2024 to 2027, following the end of the previous plan (AFA, 2023[31]). Over 2022, the AFA developed seven guides promoting good practices. This includes guides on the risks of breaches of professional ethics and concerning gifts and invitations to public officials and two on integrity for operators of sports federations and the Ministry of Sport and the Olympic and Paralympic Games (AFA, 2023[31]).
In recent years, France has implemented ambitious reforms to support employment, including labour ordinances and unemployment insurance reforms aimed at streamlining the labour market and strengthening incentives for those returning to work (Box 3.2). Reforms in 2016 and 2017 aimed to reduce the uncertainty around terminating permanent contracts for both employers and employees and reduce the use of temporary contracts (OECD, 2019[4]). These reforms reduced previously high levels of employment protection, although it remains above the OECD average (OECD, 2024[32]). The share of temporary workers has declined since 2017, but at 16.2% in 2022, remains above the OECD average of 11.3% (OECD, 2024[33]). Temporary employment is particularly high for 15–24-year-olds, at 55.7% compared to 25.3% for the average OECD country. The vocational training reform, the development of apprenticeships and the significant investment in skills have all aimed to improve the employability of workers, facilitate their integration or retraining, and better match job supply to demand. The move to turn the employment competitiveness tax credit (Crédit d’impôt compétitivité emploi, CICE) into a permanent reduction in social contributions and build on broad reductions for low wages have sought to reduce labour costs and make it easier to hire new employees. In 2022, the unemployment rate reached its lowest level in forty years, averaging 7.3% for the year. The government will need to continue its reforms to achieve the goal of full employment.
To reach this goal, the government is reforming the governance of the public employment service by implementing a network of stakeholders to promote employment and integration. This “network for employment” (Réseau pour Emploi) is coordinated by a new operator, France Travail (formerly Pôle Emploi). The network will better connect key operators and institutions through common practices and data sharing to better address jobseekers’ difficulties in areas such as health, housing, childcare and mobility (Box 3.2) (Ministère du Travail du Plein Emploi et de l'Insertion, 2023[34]). Under the reform, all minimum-income RSA benefit recipients will automatically be enrolled with the employment service as of 1 January 2025 at the latest, to ensure that everyone benefits from tailored support and to address potential barriers to employment. The reforms to improve the public employment service are a welcome move, but the level of complexity of the task and the required coordination efforts will be challenging and require careful implementation. A scientific committee has been set up to assess the benefits of these reforms over the coming years to continuously improve the effectiveness of public employment services.
The France Travail reform also aims to improve the matching of the supply and demand for workers by developing a new range of services for businesses. This will help to better support businesses’ recruitment needs, which have been particularly challenging in the current tight labour market (see Chapter 2). The goal is to reduce the length of recruitment processes and help 80% of recruiting companies find the employees they need. A survey of business leaders conducted in 2019 showed that only 49% were satisfied with quality of services provided by Pôle Emploi (Canevet and Kennel, 2020[35]; Ministère du Travail du Plein Emploi et de l'Insertion, 2023[34]). France Travail will work with stakeholders in the network for employment to target this intensified support at small and medium-size businesses, as recommended in the 2021 Economic Survey (OECD, 2021[16]). The reform facilitates procedures for businesses by creating a single entry point for posting job vacancies and a single point of contact. It also increases support to businesses to help reduce early terminations, improve the attractiveness of employers and boost the inclusiveness of companies by raising the awareness of companies so that they hire more young, older and disabled workers. Combined with a reinforced training offer, the reforms are a welcome step to provide better guidance to businesses in search of information and support.
Under the law on full employment (loi plein-emploi), Pôle Emploi became France Travail on 1 January 2024. The “network for employment” (Réseau pour Emploi) will come into force no later than 1 January 2025. In addition to the government and local authorities, the network connects three operators: the jobseeker support agency, Pôle Emploi, now renamed France Travail, local missions supporting young people and the agency supporting people with disabilities, Cap Emploi. It also connects other stakeholders such as social security offices (CAF). Each operator retains its responsibilities within a network of common governance and practices, shared tools and connected information systems. The France Travail reform will significantly improve its training and employment support, refresh its governance structure and increase its territorial coverage.
An unemployment insurance reform linking unemployment benefit durations to the economic cycle came into force on 1 February 2023. This reform aims to respond to shortages in workers and promote full employment by aligning benefit duration with the economic cycle, recognising differences in the trade-off between insurance and incentives at different points of the business cycle. The previous unemployment benefit duration of up to 2 years for those aged 53 and below may have played a role in the structural mismatch between the demand and supply of labour (Bénassy-Quéré, 2023[36]). Under the new rules, unemployment benefit duration is reduced by 25% whenever the unemployment rate is below 9% and increased by less than 0.8 percentage points in the past quarter, while maintaining a minimum duration of six months.
Source : Ministère du Travail du Plein Emploi et de l’Insertion (2023[34]; 2023[37]).
Stronger productivity and employment will also hinge on effectively supporting young people in improving their skills and mastering the transition into the labour market. At the same time, young people’s labour market outcomes are often more impacted during economic downturns and some are still suffering from the legacy of the pandemic-related recession. While the government provides significant support to young people, in 2022, 17.3% were unemployed and 55.7% of those working were on temporary contracts, higher than the respective rates for the overall working population (Figure 3.7).
The forthcoming evaluations of the Contrat d’Engagement Jeune, which provides personalised guidance and financial support to under-26-year-olds struggling in the labour market, could help to improve the effectiveness and targeting of the programme. A recent study highlighted the significant positive impact of the Youth Guarantee (Garantie Jeunes) scheme on helping young people find work: beneficiaries had an employment rate of 54%, averaging 21% higher than those who had not benefited from the scheme. However, this impact was primarily due to fixed-term and temporary contracts (Filippucci, 2023[38]). In early 2022, France replaced its Youth Guarantee benefit with the Contrat d’Engagement Jeune programme, where recipients can receive a monthly allowance of up to EUR 528. Between its implementation in March 2022 and end-November 2022, the programme had contracts with around 278,000 young people (an increase of 59% compared with the Youth Guarantee scheme), and particularly with those under 21 years old and with low levels of qualifications (Conseil d’Orientation des politiques de Jeunesse, 2022[39]). A survey conducted a few months after the programme was implemented showed a promising start but noted access-related challenges for those most at risk (Conseil d’Orientation des politiques de Jeunesse, 2022[39]). Most young people in the programme were already known to the public employment services, which may be a result of the rapid implementation of the programme. Continuing to reach out to young people on the margins of society, increasing support for the obstacles that some young people face, including accessing healthcare and housing and meeting the activity requirements, as planned in the reforms to the public employment services, and preventing breaks in payments will better support young people to transition into the labour market (Conseil d’Orientation des politiques de Jeunesse, 2022[39]). In addition, reducing the administrative burden for operators and providing the financial resources for operators to monitor young people’s career paths after they join the labour market could help guarantee the long-term integration of young people (Conseil d’Orientation des politiques de Jeunesse, 2022[39]).
Note: Young people refers to 15- to 24-year-olds. Adults refers to 25- to 64-year-olds. Panel B: Data for Australia and the United States is from 2017.
Source: OECD Labour Force Statistics (database).
Apprenticeships are an effective way to give young people experience in the labour market during their training, although targeting substantial support could better support labour market outcomes. In France, apprenticeships are available for those aged 16 to 29, can last for between six months to 3 years depending on the qualification and are available for both vocational and tertiary qualifications, unlike in many other countries. The government introduced additional and unprecedented support for apprenticeship schemes in 2020, which was extended into 2022. This was in addition to the existing benefits of an exemption of employee social security contributions and income tax. As a result, the number of apprenticeships increased from around 440,000 contracts at the end of 2018 to around 1,020,000 contracts at the end of 2023. Since the end of 2019, the exceptional support is estimated to have generated around 240,000 jobs by the third quarter of 2022 (Dares, 2023[40]), and 250,000 jobs by the end of 2022 (Heyer, 2023[41]). Continuing trends in employment and apprenticeships suggest that around 210,000 jobs were substituted from other forms of employment towards apprenticeship (Coquet, 2023[42]). In its final report, the France Relance Evaluation Committee estimated the introduced of the exceptional support for apprenticeships for 2020 alone created some 80,000 jobs, which would equate to around 200,000 contracts since the programme’s inception, assuming a constant number of new apprentices over time (Comité d'Evaluation du Plan France Relance, 2024[43]). By 2022, tertiary graduates took up the majority of apprenticeships, whose entry into employment is already very good in a number of sectors and only marginally improved by apprenticeships (Cour des Comptes, 2022[44]). Nevertheless, the development of apprenticeships in higher education has indirect economic effects, by helping to improve the image of apprenticeships, strengthening the equality of opportunity for students who would not otherwise have been able to access higher education without remuneration and promoting the economic development of small firms, which are able to integrate new skills. Since 1 January 2023, all businesses taking on apprentices have received financial aid set at EUR 6,000 per apprentice, irrespective of their age, up to master’s level. Increasing the targeting of financial support to young people with low skills and who are the furthest away from the labour market could improve the support for those most in need whilst generating substantial fiscal savings.
The share of women participating in the labour market has steadily increased in recent decades although it remains below that of men (Figure 3.8, Panel A). Around 66% of working-age women were employed in 2022, similar to the OECD average, up from around 62% pre-pandemic. The gender employment gap narrowed to around 5 percentage points in 2022, compared to 10 percentage points for the OECD average. The increase in the employment rate of women has occurred across age cohorts, and particularly for workers above 45 years. In 2019, 35% of people in France said that gender may put a candidate at a disadvantage when a company wants to hire someone compared to 28% in the European Union (Eurostat, 2019[45]).
France has implemented numerous measures to equalise labour market outcomes, but additional efforts could accelerate progress further. The gender wage gap is around the OECD average. A full-time female worker earns almost 12% less than her male counterpart on average, increasing to 24% for a female worker in the top income decile. More women hold senior positions than the OECD average, although the share remains unequal. Almost 40% of managers in France are women, above the OECD average of 34%, and women hold around 45% of seats on boards of the largest publicly listed companies, well above the OECD average of 30%. Since 2019, France has imposed that firms with over 50 employees must publish their “Index of professional equality” (index de l’égalité professionnelle) annually and since 2022, and poorly performing firms must publish corrective measures and improvement targets. Since 2022, firms with over 1000 employees must publish gender representation across their senior executives and management, with a target of 30% of women and men in senior management and management bodies by 2026 and 40% by 2029. Firms will have two years to comply or be subject to financial penalties. OECD data suggests that on average France already meets these targets. Accelerating the time frame of these targets could more rapidly equalise labour market outcomes between genders. In the national administration, only 31% of women hold senior management positions compared to 42% in the average OECD country, a share that has remained broadly unchanged over the past decade.
Note: Panel A: The labour force participation rate is calculated as the labour force divided by the working-age population (15-64 years old). Panel B shows the difference in median wages of men and women, relative to the median wages of men.
Source: OECD Labour Force Statistics (database); OECD Family Database.
Further developing the provision of early childcare services, particularly for the lowest income households, could further support women’s labour market outcomes as well as children’s learning opportunities (see Chapter 5). Around 76% and 68% for 0–2-year-olds from families in the first and second income terciles attend formal childcare compared to 27% for 0-2 year olds from families in the bottom tercile, the largest gap across OECD countries (Figure 3.8, Panel B). The main barrier appears to be the supply of places, particularly in childcare centres, (HCFEA, 2023[46]) (HCFEA, 2023[47]) (Direction générale du Trésor, 2023[48]), while costs are below the OECD average. The government has ambitious plans to increase the capacity of childcare centres, with targets in the 2013-2017 and 2018-2022 agreements unmet. The law of 18 December 2023 on full employment includes a number of different measures related to childcare facilities and aims to make 200,000 new places available by 2030. The goal is to make jobs in childcare facilities more attractive to address shortages of qualified staff. The government also plans to replace current provisions for parental leave of up to three years with a shorter, six-month, better-paid leave scheme following the birth of a child, available to both parents at the same time. This targets the issue of extended periods of absence from work, which can create a barrier to employment for some people under the current system of parental leave, predominantly affecting women.
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