20180129-NATIXIS-France__A_twofold_virtuous_cycle_should_be_initiated_9页_931kb

报告摘要

The document outlines two major structural problems facing France and proposes a twofold virtuous cycle to address them. These issues are:

Both problems are identified as significant barriers to economic growth and fiscal sustainability.

France's unemployment rate is currently at an abnormally high level, indicating that the economy is not efficiently absorbing the labor force.
Recruitment difficulties are evident across various sectors (Chart 2), suggesting that the unemployment rate is close to the structural rate.
The high unemployment rate is attributed to inefficiencies in the education system and a lack of skills among the youth, leading to low employability.
Chart 4 illustrates the low employability of young French people, reinforcing the link between education quality and unemployment.

The tax burden in France is notably high, especially corporate social contributions (Chart 3B), which negatively impact labor demand and contribute to structural unemployment.
High tax levels increase the fiscal pressure on the government and reduce the incentive for businesses to hire, particularly for low-skilled workers.
This tax burden is considered one of France's second major structural problems, alongside the high unemployment rate.

France's education system is inefficient, as evidenced by PISA scores (Table 2), which are lower than those of many OECD countries.
Performance in mathematics (Table 3) and reading comprehension (Table 4) is below the global average, especially compared to countries like Singapore and Japan.
Enhancing education quality is essential to reduce structural unemployment and improve the employability of young people.
However, the document notes that this cycle has not yet begun.

The employment rate for the 55-64 age group has been increasing since 2009, but the 60-64 age group still lags behind other OECD countries (Table 5).
A further rise in this employment rate could boost the potential GDP and reduce government pension expenditures.
This would, in turn, lower the overall tax burden, particularly corporate social contributions, which are a key structural issue.

Chart 1 and Chart 2 highlight the high unemployment rate and recruitment challenges in France.
Chart 3A and Chart 3B show the high tax burden, especially corporate social contributions.
Chart 5 and Chart 6 illustrate the potential benefits of increasing the employment rate of older workers.
The employment rate of the 60-64 age group has started to improve, indicating that the second virtuous cycle is underway.
The first virtuous cycle (education system efficiency) has not yet begun.

France needs to initiate two virtuous cycles to address its structural issues:
- Improvement in the education system to reduce structural unemployment.
- Increase in the employment rate of the 55-64 age group to raise potential GDP and reduce pension-related government spending.
Currently, only the second cycle has started, while the first remains unaddressed.

The document is intended for professionals and qualified investors.
It is strictly confidential and must not be disclosed to third parties without prior consent.
It does not constitute a financial analysis or a personalized investment recommendation.
Natixis does not accept liability for the information provided or for any actions based on it.
The views expressed are those of the authors and may differ from those of Natixis or its affiliates.
The document is not an offer or solicitation for any purchase, sale, or subscription.
It is based on public information and does not take into account specific tax or accounting rules.
It is subject to the regulations of various financial authorities, including the ECB, ACPR, AMF, FCA, and others.

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