Why is Unemployment in France so High?

82 Pages Posted: 15 Feb 2006

See all articles by Reza Moghadam

Reza Moghadam

affiliation not provided to SSRN

Date Written: May 1994


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.

JEL Classification: E24, J31, J32, J38, J64, J65

Suggested Citation

Moghadam, Reza, Why is Unemployment in France so High? (May 1994). IMF Working Paper No. 94/58, Available at SSRN: https://ssrn.com/abstract=883530 or http://dx.doi.org/10.2139/ssrn.883530

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