France: The issue of inequality

Series on the debates of the French presidential campaign – No. 7 This Flash analyses an issue that should be central to France’s presidential campaign . Inequality is obviously a hot topic in France, where perceptions of the evolution of inequality are sometimes very different from the reality. Income inequality after redistribution in France is low and stable, despite very high income inequality before redistribution - due in particular to a low employment rate - thanks to the extent of its redistributive policies. But wealth inequality is high and being driven higher by very rapid growth in asset prices (equities, real estate). The discussion (which is a matter not only of equity, but of also economic efficiency) should therefore focus more on wealth inequality, and how it can be reduced, than on income inequality. It is then vital to separate out justifiable rents from those that are not justifiable.