The reasons to fear a rise in structural unemployment in France

We believe there is a risk in France that the rise in unemployment after the COVID crisis will be driven by structural unemployment and not just by cyclical unemployment. Indeed, s tructural unemployment may rise due to : The shift in the sectoral structure of the economy, which may create the need for many jobs to shift from one sector to another, where different skills are sought; The fact that young people will struggle to enter the labour market; The increase in cost competition, which is negative for France given its high labour costs and relatively low skill level; The deterioration in the financial situation of companies, which will be a persistent brake on hiring and drive up the number of listless zombie firms.