Is France making progress? Income inequalities between residents are lower in France than in other countries, according to a new report published on Tuesday June 20 by the bank Natixis, and led by economist Patrick Artus. They are all the weaker “if we include health, education, social and housing policies in redistributive policies”, specify the organization.
To arrive at this observation, Natixis relied on the Gini index, which makes it possible to account for inequalities within a population. The closer the index is to 1, the greater the inequalities. In France, it amounts to 0.29, according to data published by the OECD in 2021. This is less than in Spain (0.33), than in Italy (0.33) or that in the UK (0.35). On the other hand, income inequalities in France remain higher than in Norway (0.28) or in Finland (0.27).
The OECD points out that the income studied includes wages, self-employment income, capital income and monetary transfers received from the State, after deduction of income tax and social security contributions. “We see that the redistributive system in France, taking into account all its components, leads to low income inequalities”, comments Natixis.
Greater inequalities in access to employment
The report also looks at two other types of inequality: inequalities in wealth, and inequalities in access to education and employment. Wealth refers to property owned by an individual, which includes real estate, land or shares. Inequalities in wealth are particularly significant in France. They are stronger than in Finland, Denmark, the Netherlands, Italy, the United Kingdom or Spain, details Natixis. Half of the best-endowed French households alone hold 92% of gross wealth, according to the latest INSEE figures published in 2021.
Worse still: wealth inequality is on the rise. This increase is mainly due to the fact that “the return on risky assets held by wealthy households (equities, real estate, etc.) is on average higher than the return on non-risky assets held by low-income households (bonds through passbooks savings or life insurance)”, explains Natixis.
With regard to inequalities in access to education and employment, they are “the most serious”, considers the bank. Based on the latest results of the Pisa survey, it reports a “poor quality of the French education system”. According to her, this situation leads to a high unemployment rate among young people and a high proportion of out-of-school young people. The employment rate of French people aged 20 to 24 barely exceeds 55% according to the OECD, compared to 70% for Germany or 80% for the Netherlands. “The employment rate is lower for low-skilled people than for skilled people,” says Natixis. “This type of inequality can be dealt with through more effective education and training policies, not through redistributive policies.”