Why is Unemployment in France so High?

Author/Editor:

Reza Moghadam

Publication Date:

May 1, 1994

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

High and persistent unemployment, as well as its composition, e.g., high youth unemployment, suggests underlying structural problems in the French labor market. Comparisons with other industrial countries, as well as time series and cross-section empirical evidence, point to a number of potential causes of structural unemployment in France. These Include the generosity of long-term relative to short-term unemployment benefits, the minimum wage, the level of employers’ tax wedge, skills mismatch, and the cost of capital. The paper assesses recent labor market measures in France that are considered, on the whole, as a step in the right direction, and puts forward a number of additional possible measures which could help to ensure that when the economic recovery gathers pace, unemployment will decline more quickly and more substantially than in the past.

Series:

Working Paper No. 1994/058

Subject:

Employment Labor Labor markets Minimum wages Unemployment Wages

English

Publication Date:

May 1, 1994

ISBN/ISSN:

9781451966589/1018-5941

Stock No:

WPIEA0581994

Pages:

84

Please address any questions about this title to publications@imf.org