France and Italy: Low skills cannot be corrected by using fiscal deficits
France and Italy are chara cterised by very low labour force skills , and a comparison of OECD countries shows that low skills go hand - in - hand with a low employment rate, a high level of structural unemployment , and deindustrialisation. In these two countries, low incomes and income inequality are therefore closely associated with low skills. It is obviously possible to boost low incomes and reduce inequality by using government transfer payments, and therefore fiscal deficits. But the only sustainable way to restore incomes and reduce inequalities in the medium term is therefore to improve skills, which cannot be replaced by a permanent fiscal deficit.