France: What to expect from an increase in the retirement age?

France’s public pension system is once again going to be imbalanced (a deficit is expected for 2025 of EUR 8-17 billion). Yet again, this raises the question of raising the retirement age, while the employment rate among 60-64 year olds in France is low. What should be expected from an increase in the retirement age? A comparison of OECD countries shows that a high employment rate among 60-64 year olds is associated with a high employment rate among 15-29 year olds, 20-29 year olds and 30-59 year olds, and with low total and youth unemployment rates. This suggests that raising the retirement age will not end up increasing youth unemployment; Raising the retirement age, ceteris paribus , will make it possible to reduce social contributions (by 0.8 percentage point of GDP for each year added to the retirement age). There is also a high correlation between the weight of corporate social contributions and the employment rate, which explains our first finding: a higher retirement age drives up the employment rate through its effect on the tax burden.