France’s potential growth and living standards would benefit from a virtuous circle if the country dared to raise the retirement age

If the French government dared to raise the retirement age, it would trigger several virtuous mechanisms for potential growth and living standards: It would make it possible to lower the corporate tax burden, leading to a further rise in the employment rate beyond the mechanical effect of the increase in the retirement age; It would make it possible to offset the effect of population ageing on the labour force and therefore on per capita GDP; The government could convert the public spending on pensions into pro-growth public investments.