Report
Patrick Artus

The conundrum of the public sector in France

While public spending in France is the highest in relation to GDP of all OECD countries, there are continuous ly complaints in France about the insufficient resources for healthcare (emergency rooms, retirement homes), education (low wages for teachers, low budgets per student), police, justice and social work, insufficient public housing, etc. How can this across-the-board shortfall in resources be compatible with such a high level of public spending? We see two explanations: The high weight of public spending on pensions in France; The low efficiency of the public sector in France, which can be seen from the low level of labour productivity (which we calculate by the ratio between public sector employment and public spending excluding wages). If there is a desire to increase the resources of public services in France without increasing the tax burden, public spending on pensions must therefore be reduced ( the retirement age must be raised) and labour productivity in the public sector must be increased.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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