In order to raise standards of living and ensure the long-term viability of France’s social welfare system, labour utilisation rates need to be increased substantially and the rate of growth of productivity raised. As indicated in Chapter I and notwithstanding the strong employment growth of the past several years, France has among the lowest employment rates in the OECD (22nd out of 30 countries in 2001). While raising France’s employment rate to OECD average levels -- or even that of the best performers -- would not permanently raise the rate of growth of potential output, it would raise the long-term level of potential and, during the transition period, its rate of growth…