OIt is sometimes read that labor productivity in France is high: this observation is however no longer valid, quite the contrary. Data from a recent note from the Economic Analysis Council show a marked slowdown over the past fifteen years compared to Germany and the United States. While in the mid-2000s labor productivity in France was higher than in the United States and at the same level as in Germany, fifteen years later, the picture is no longer so rosy: productivity in France has stalled, and we are now outpaced by both Germany and the United States.
How big is the problem? To realize this, let’s assume that the dropout did not occur and that France maintained its relative productivity compared to Germany and the United States. In this case, according to our estimates, France’s gross domestic product (GDP) in 2019 would have been 140 billion euros higher. This is a huge shortfall for the purchasing power of the French, but also for public finances, which would garner 65 billion in additional tax revenue each year if productivity had not stalled.
This result runs counter to what is still fairly common discourse according to which the low employment rate in France is the alpha and omega of the structural problems of our economy. In fact, the macroeconomic issues of slowing productivity and low employment are very similar. For example, if in 2019 the employment rate in France had reached that of Germany, i.e. around 10 points higher, then GDP would have increased by around 120 to 170 billion euros ( depending on the methodology used), i.e. an effect close to that of better productivity. Conclusion: it is at least as important to accelerate productivity as to increase the employment rate.
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Why is productivity experiencing such a slowdown in France? Empirical analysis shows that this is not due to a small number of sectors of activity. Everyone contributes to it, including industry, construction, trade and skilled services. Similarly, it cannot be said that certain categories of companies explain the trend – VSEs-SMEs, ETIs and large companies contribute to it.
If all sectors and all companies are seeing their productivity drop, then where does the problem come from? Our analysis identifies “human capital” as the main factor, according to two aspects: on the one hand, poor mathematical and socio-behavioral skills (the ability to work in a team, to negotiate, to manage resources); on the other hand, an insufficient orientation of young people towards the professions of the future, in particular the scientific sectors.
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