Total employment in the OECD returned to pre-crisis levels at the end of 2021 and continued to grow in the first months of 2022. The OECD unemployment rate gradually fell from its peak of 8.8% in April 2020 to a level of 4.9% in July 2022, slightly below the 5.3% value recorded in December 2019. However, the labour market recovery has been uneven across countries and sectors and is still incomplete, while its sustainability is challenged by the economic fallout of Russia’s unprovoked, unjustified and illegal war of aggression against Ukraine.

  • The impact of the COVID-19 crisis on the labour market was cushioned by the extensive use of the country’s job retention scheme. The unemployment rate has fallen in France from its peak of 8.9% to 7.5% (July 2022) − below pre-pandemic levels and at one of its lowest level since 2008, but remains structurally high and above the OECD average.

  • In Q1 2022, the employment rate for those aged 15 and over was at 51.9% This reflected the steady improvement of the employment situation in France and represented an increase of 1.2 percentage points compared to pre-COVID-19 (Q4 2019).

Young people were particularly affected by the initial ravages of the crisis. By Q1 2022, on average across the OECD, young people had recovered much of the lost ground, but were still lagging behind older adults. The employment rate of those aged 15 to 24 years was below pre-crisis levels in a majority of OECD countries and, on average, just at the level of Q1 2019. By contrast it had increased over the same period by 1 and 3 percentage points respectively for adults aged 25-54 and 55 to 64.

  • In France, thanks to exceptional government measures targeted to young people (apprenticeship reform and support to the most vulnerable ones), the youth labour market situation has significantly improved, with a 4 percentage point increase of their employment rates, coupled with a decrease of inactive young people and job seekers of respectively 2.2 and 1.8 percentage points in Q4 2021 compared to Q4 2019.

  • Yet structural issues remain to be addressed: youth employment rate remains low, and below the OECD average, while youth unemployment rate is high, and above the OECD average. Apprenticeship programs mostly benefited to the high qualified, thus failing to help the low qualified ones strengthening their link with enterprises and facilitate their entry in the labour market. In this context, some targeting in apprenticeship programs may be necessary together with a revamping and strengthened support to vocational high schools.

Vacancies surged to record highs in the OECD area, and reports of labour shortages rose significantly in many industries and countries. Despite this, nominal wage growth remains well below the high inflation induced by the commodity price hikes spurred by Russia’s war of aggression against Ukraine. The decline in real wages is expected to continue over the course of 2022, as inflation is projected to remain well above the negotiated nominal wages for 2022.

  • Compared to other OECD countries, the decrease in real wages in France was relatively modest over the first quarters of 2022 due to relatively contained inflation rates (resulting from exceptional government measures to mitigate the effect of the energy price hikes, see next section).

  • Negotiated wage increases in several sectors, as well as the automatic uprating procedures of the French national minimum wage (+0.86% on 1 January 2022, +2.65% on 1 May 2022 and 2.03% on 1 August 2022) also contributed to preserve workers’ purchasing power.

Russia’s war of aggression against Ukraine has brought new challenges. It has contributed to the highest inflation in decades, notably through price increases for energy and commodities. Low-income households, who spend a large share of their tight budgets on energy and food, are particularly affected. On average, for the OECD countries for which data are available, households in the bottom income quintile spend 50% more of their consumption budget on food and energy than those in the top income quintile. Targeted support, which often takes the form of transfers, involves lower fiscal costs, expands demand less at a time of high inflation and is better in line with the green transition.

  • Outstanding expenditure (estimated at around EUR 35 billion or 1.4% of GDP) have been allocated by the French Government to shield households and firms from the rising energy prices and their consequences.

  • A wide range of measures (both targeted and non targeted) have been introduced as a bouclier tarifaire of which: a freeze of gas tariffs, the regulation of electricity prices, a tax discount on fuel, energy vouchers and lump-sum transfers for low-income, as well as subsidies for firms highly dependent on gas and electricity. As energy price hikes persist, further targeting would become be necessary.


Sandrine CAZES ( [email protected])

Stéphane CARCILLO ( [email protected])

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