2017 oecd economic survey of france€¦ · 2017 oecd economic survey of france . towards more...
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http://www.oecd.org/eco/surveys/economic-survey-france.htm
2017 OECD ECONOMIC SURVEY OF FRANCE
Towards more inclusive growth and employment
Paris, 14 September 2017
@OECD @OECDeconomy
• A long-term strategy would help to reduce public spending and improve its impact on equity
• Fostering an inclusive development of skills and employment
• Improving life in poor neighbourhoods • Improving the efficiency of the health-care
2
Main messages
Potential growth has slowed
3
Source : OECD (2017), OECD Economic Outlook 101 Database.
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
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Capital per worker Labour input TFP Potential growth
Too many people are excluded from the labour market
4
Source: OECD (2016), OECD Education at a Glance 2016 Database.
0
5
10
15
20
25
30
35
0
5
10
15
20
25
30
35
ISL
NLD
CHE
LUX
DEU
SWE
NOR
JPN
AUT
DNK
AUS
CZE
EST
LVA
CAN
NZL
GBR
BEL
ISR
FIN
USA
OECD SV
NPR
TPO
LHU
NIR
LFR
ASV
KKO
RCH
LM
EX ESP
GRC
ITA
TUR
Youths not in employment, education or training (NEET), 2015% of the 15-29 population
Public spending is high
5
Per cent of GDP, 2016
Source : OECD (2017), OECD Economic Outlook 101 Database.
0
10
20
30
40
50
60
0
10
20
30
40
50
60
IRL
CHE
USA
JPN
CZE
EST
CAN
OECD PO
L
SVK
GBR
ESP
NLD
DEU
PRT
SVN
HUN
EA16
GRC
ITA
SWE
AUT
BEL
DNK
FIN
FRA
Developing a long-term strategy to reduce public spending and
taxes
6
Without policy changes the debt-to-GDP is set to increase further
7
Debt simulations (per cent of GDP)
Source: OECD calculations based on OECD (2017), OECD Economic Outlook 101 Database.
50
60
70
80
90
100
110
120
130
140
50
60
70
80
90
100
110
120
130
140
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Business as usual¹Higher interest rate² (+1.4% points)Further improvement in the primary balance (+0.5% points) and higher GDP growth (+0.5% points)
Pension spending and the wage bill explain most of the gap in public spending
8
1. Numbers may not add to totals because of rounding, overlapping across selected spending categories and non-universal coverage of all spending categories. 2. Excluding pre-primary education. Source: OECD Economic Outlook 101 Database; OECD Social Expenditure Database (SOCX); OECD Education at a Glance 2016 Database.
Composition of public spending by main component
The average effective age of labour-market exit is low
9
Average effective age of labour-market exit in 20141
1. The effective retirement age shown is for the five-year period 2009-2014. The official pension age is shown for 2014, assuming labour market entry at age 20.
2. Belgium introduced a certain number of measures in 2015 to raise the effective age of labour market exit, focusing on conditions for accessing early retirement.
Source : OECD (2015), OECD Pensions at a Glance 2015, OECD Publishing, Paris.
Iceland
Men Women
KoreaMexico
Turkey
JapanChileIsrael
New ZealandPortugal
SwitzerlandUnited States
IrelandAustraliaSwedenNorway
Spain
OECDCanada
United KingdomEstonia
Czech RepublicDenmark
NetherlandsGermanyHungarySloveniaAustria
Belgium²France
PolandLuxembourg
FinlandItaly
GreeceSlovak Republic
50 55 60 65 70 75505560657075
Corporate tax rates are high
10
Source: Oxford Centre for Business Taxation (2017), CBT Database.
0
5
10
15
20
25
30
35
40
0
5
10
15
20
25
30
35
40
IRL
SVN
CZE
POL
TUR
CHE
ISL
FIN
KOR
GBR
HUN
NLD
SVK
SWE
DNK
ISR
AUT
OEC
DNO
RCA
NES
TIT
ALU
XCH
LPR
TG
RC NZL
MEX AU
SDE
UES
PBE
LJP
NFR
AUS
A
Average effective corporate tax ratesPer cent, 2016
But corporate income tax revenues are low
11
Source: OECD (2017), OECD Revenue Statistics Database.
0
1
2
3
4
5
0
1
2
3
4
5
SVN
LVA
TUR
DEU
POL
HUN
GRC
ITA
EST
FRA
FIN
USA
AUT
ESP
GBR
DNK
IRL
NLD
OECD IS
LSW
EIS
RCH
ECA
NPR
TKO
RM
EX BEL
SVK
CZE
JPN
LUX
NZL
NOR
AUS
CHL
Corporate income tax revenuesAs a percentage of GDP, 2015
The personal income tax represents a low share of total tax revenues
12
1. 2014 for the OECD. 2. Including the contribution sociale généralisée. Source: OECD (2017), OECD Revenue Statistics Database.
Personal income tax², 18.9%
Corporate income
tax,4.6 %
Social security
contributions,37.1 %Taxes on payroll
and workforce,3.5 %
Taxes on
property,8.9 %
Taxes on goods and services,
24.4%
Other taxes, 2.7%A. France
Personal income tax², 24.0%
Corporate income
tax,8.8 %
Social security
contributions,26.2 %
Taxes on payroll and workforce,
1.1 %
Taxes on
property,5.6 %
Taxes on goods and services,
32.6%
Other taxes, 1.8%B. OECD
2015¹
Exemptions and VAT tax breaks lead to a substantial shortfall
13
1 Ratio between the actual value-added tax (VAT) revenue collected and the revenue that would theoretically be raised if VAT was applied at the standard rate to all final consumption. It implicitly measures the share of potential tax revenues lost due to the existence of preferential tax treatments. Source: OECD (2016), Consumption Tax Trends 2016: VAT/GST and excise rates, trends and policy issues, OECD Publishing,
Paris.
VAT revenue ratio1 (%), 2014
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
MEX
GRC ITA
ESP
TUR
POL
GBR ISL
BEL
NLD
SVK
PRT
FRA
IRL
AUS
CAN
LVA
FIN
DEU
OECD NO
RHU
NSW
ECZ
EDN
KAU
TSV
NCH
LIS
RKO
RJP
NES
TCH
ENZ
LLU
X
Main recommendations to reduce public spending and taxes
Meet the ambitious targets to reduce public spending and taxes Move towards a single pension system to improve labour mobility and lower
management costs
Then, gradually increase the minimum retirement age in line with life expectancy
Lower social contribution rates and corporate income tax rates, as planned Use lower social contributions as an opportunity to give a bigger role to the
progressive income tax, e.g. by lowering the basic allowance
Remove personal tax breaks on capital income, and lower the tax rate
Withdraw reduced rates for VAT, and increase green taxes
14
Fostering an inclusive development of skills and employment
15
Too many adults have weak basic skills
16
Source: OECD (2016), Skills Matter: Further Results from the Survey of Adult Skills, OECD Skills Studies, OECD Publishing, Paris.
0
10
20
30
40
50
60
0
10
20
30
40
50
60
JPN
FIN
SVK
NLD
CZE
NZL
NOR
AUS
KOR
EST
SWE
BEL
AUT
DNK
CAN
GBR
IRL
USA
DEU
POL
OECD FR
ASV
NGR
CIS
RES
PIT
ATU
RCH
L
% %Share of adults 16-65 scoring below level 2 in PIAAC's reading proficiency scale
2012-2015
Strengthen apprenticeships and public employment services
17
Source: Ministère de l’Éducation nationale, DEPP.
0
50
100
150
200
250
300
0
50
100
150
200
250
300
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Number of apprentices with a low level of educationAt year-end, thousands
It is difficult to get a permanent contract
18
1. Employees on temporary contract in year t-1 but declaring having been hired on a permanent contract in year t. Source : Eurostat.
0
10
20
30
40
50
60
70
0
10
20
30
40
50
60
70
ESP
FRA
GRC ITA
POL
EU28 FIN
PRT
SVK
DEU
LUX
HUN
BGR
SWE
BEL
NLD
SVN
CZE
IRL
LTU
NOR
EST
AUT
DNK ISL
ROU
LVA
GBR
Transition rates from temporary to permanent contracts, 2015 (%, 16-64)¹
Unionisation is low
19 Source : OECD (2017), Labour Force Statistics Database.
0
10
20
30
40
50
60
70
80
90
0
10
20
30
40
50
60
70
80
90
EST
TUR
FRA
KOR
HU
NU
SA CZE
POL
SVK
MEX
AUS
CH
LC
HE
OEC
DES
PJP
NN
LDD
EU NZL
PRT
SVN
GR
CIS
RG
BRC
AN IRL
AUT
LUX
ITA
NO
RBE
LD
NK
SWE
FIN
ISL
Trade union density, 2014Trade union members in per cent of employees, %
But the collective bargaining coverage rate is very high
20
0
10
20
30
40
50
60
70
80
90
100
0
10
20
30
40
50
60
70
80
90
100
TUR
KOR
USA
MEX PO
LLV
ANZ
LJP
NCH
LHU
NES
TSV
KIS
RCA
NG
BRG
RCO
ECD
CZE
CHE
DEU
LUX
AUS
SVN
NOR
PRT
ESP
ITA
DNK
NLD
ISL
SWE
FIN
BEL
AUT
FRA
Collective bargaining coverage rate, 2013Per cent of all wage earners with right to bargaining
Source: Amsterdam Institute for Advanced Labour Studies (2017), ICTWSS Database.
Main recommandations to foster an inclusive development of skills
21
Simplify the personal training account (CPF), and reduce the number of similar schemes
Improve information about providers by strengthening the quality label system
Develop apprenticeships in vocational lycées
Continuously evaluate active labour market policies
Introduce professional judges to guide lay assessors in labour courts
Merge inactive sectors and those that lack the critical mass for effective bargaining
Ensure that the extension procedure for sectoral agreements takes account of their economic and social impacts, and authorise exemptions
Encourage sectoral agreements that are differentiated by the size or age of the business, for example
Reduce the number of institutions that represent workers
Ensure better protection for workers that represent colleagues
Improving life in poor neighbourhoods
22
Residents of poor neighbourhoods face various social handicaps
23
1. Percentage point gap in the odds of unemployment for poor neighborhoods' residents versus residents of surrounding urban areas; employed native-born women aged 30 to 49 with a baccalauréat only are identified as the reference group. 2. Refers to post lower secondary education vocational qualifications such as: Certificat d’aptitude professionnelle (CAP) and Brevet d’études professionnelles (BEP) Source : ONPV (2016), Rapport annuel 2015.
0
5
10
15
20
25
30
0
5
10
15
20
25
30
≤ Lower secondary Below upper secondary ² Upper secondary Tertiary
Poor neighbourhoods Surrounding urban areas
Likelihood of unemployment by place of residence and educationAdjusted for personal characteristics, education and immigrant status¹, 15-64 (%)
Reducing inequalities in educational opportunities
24
1. Percentage variance in the PISA reading score for children aged 15 years explained by family environment (parents’ level of education and income, social and occupational status, cultural possessions, books and education resources available at home). Source: OECD (2016), PISA 2015 Results (Vol. II): Excellence and Equity in Education, OECD Publishing, Paris.
0
5
10
15
20
25
0
5
10
15
20
25
ISL
NOR
EST
CAN
USA
TUR
GBR
LVA
FIN
KOR
ISR
JPN
DNK
AUS
ITA
NLD
SWE
SVN
NZL
MEX
OECD GR
C IRL
ESP
POL
DEU
CHE
PRT
CHL
AUT
SVK
BEL
FRA
CZE
LUX
HUN
Impact of socio-economic background on pupils' reading performance¹ (per cent, 2015)
Urban renewal needs a stronger focus on well-being
25
Improving access to higher-quality housing for the poor
26
1. The first income decile includes households with average annual income below EUR 8 000, while the 10th decile refers to households with average annual income above EUR 39 000. Source : INSEE, Housing Survey 2013.
Housing tenure across households by income decile¹Metropolitan France, primary residences, 2013
0
20
40
60
80
100
0
20
40
60
80
100
I II III IV V VI VII VIII IX X Total
Social rental dwellings Market rented dwellings Owner-occupied dwellings Other
Income deciles
Main recommendations for improving life in poor neighbourhoods
Continue awareness campaign for recruiters Better target public spending at transportation, childcare services and face-to-
face public services in poor neighbourhoods Offer attractive salaries and career prospects to excellent teachers in schools
with many pupils from disadvantaged backgrounds Promote an innovative range of different practices in teacher training in order to
meet the different needs of pupils Use urban renewal in poor neighbourhoods as an entry point to offer practical
training in firms and basic skills courses Reduce registration fees, and increase taxes on immovable properties Tighten obligations to pay higher rents and encourage occupants whose income
rises above the eligibility ceiling to move houses
27
Improving the efficiency of the
health-care system
28
Health-care quality is high
29
Source: Eurostat (2016), Amenable and Preventable Deaths Statistics.
0
50
100
150
200
250
300
350
0
50
100
150
200
250
300
350
CHE
FRA
LUX
NLD
ESP
NOR
ITA
BEL
SWE
DNK
AUT
IRL
DEU
FIN
PRT
GBR
SVN
GRC
EU28
POL
CZE
HRV
SRB
EST
SVK
HUN
BGR
LTU
ROU
LVA
Deaths avoidable through better health-care, 2014Per 100 000 inhabitants
But expenditures are high and likely to increase
30
Source: OECD (2017), OECD Health Statistics Database.
0
2
4
6
8
10
12
0
2
4
6
8
10
12
1990 1995 2000 2005 2010 2015
FRANCE Germany Italy Spain
Current health-care spending, 1990-2016Per cent of GDP
There is room to improve prevention
31
1. The scope of institutional spending is different from the entirety of spending on prevention in France, especially for ordinary consultations, which amount to 9.3 billion euros in 2014 according to Drees, i.e. 3.9% of health spending, compared to 2.0% in 2014 according to OECD figures. Source : OECD (2017), OECD Health Statistics Database.
0
1
2
3
4
5
6
7
0
1
2
3
4
5
6
7
ISR
GRC
BEL
PRT
AUS
FRA
ESP
LVA
SVK
AUT ISL
CHE
LUX
DNK
HUN
SVN
POL
IRL
CZE
JPN
OECD US
ANO
RDE
USW
EES
TME
XKO
RNL
D FIN ITA GBR
CAN
Spending on prevention, 2015Per cent of health-care spending ¹
Coordination between different care providers is insufficient
32
Source : Drees (2017), Les établissements de santé – édition 2017.
80
100
120
140
160
180
200
80
100
120
140
160
180
200
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Use of emergency departments Population
Hospital emergency departments' useIndex, 1996=100
Hospital expenditures are high
33
Source : OECD (2017), OECD Health Statistics database.
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
LVA
MEX CZ
EKO
RES
TPR
TCA
NIS
RSV
KHU
NPO
LES
PG
BRSW
EO
ECD
FIN
IRL
SVN
ITA
AUS
NOR
DNK
BEL
USA
DEU
NLD
JPN
CHE
FRA
GRC AU
T
In-patient curative and rehabilitative care, 2015Per cent of GDP
Developing the use of generics would cut costs
34
Source : OECD (2017), OECD Health Statistics database.
0
10
20
30
40
50
60
70
80
90
0
10
20
30
40
50
60
70
80
90
LUX ITA GRC CHE FRA BEL IRL PRT ESP AUT TUR DNK SVK NLD NZL DEU GBR
Value Volume
Use of generics, 2015Share in the reimbursed pharmaceutical market, %
Main recommendations to improve the efficiency of the health-care system
35
Increase health practitioners’ remuneration for prevention and complex chronic diseases, which would help reduce the volume of treatments, prescriptions and drug sales
Make it easier for insurers to contract with group practices
Develop electronic health records
Adjust the activity-based system for hospital funding (Diagnosis Related Groups) to increase rewards for efficiency and quality for public and private hospitals
Strengthen the autonomy of public hospital managers by allowing them to develop their own human resource policies
Lower pharmaceutical spending by developing the use of generics, developing targeted information for hospitals and primary-care providers to promote appropriate prescribing and applying capped reimbursement amounts to a wider range of drugs
For more information
Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
36
http://www.oecd.org/eco/surveys/economic-survey-france.htm
@OECDeconomy
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