Chapter

France Directing Adjustment?

Jonah D. Levy

in Welfare and Work in the Open Economy Volume II: Diverse Responses to Common Challenges in Twelve Countries

Published in print September 2000 | ISBN: 9780199240920
Published online November 2003 | e-ISBN: 9780191600180 | DOI: http://dx.doi.org/10.1093/0199240922.003.0007
 France Directing Adjustment?

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The Bismarckian welfare state in France is financed by social security contributions to an even greater degree than is true in Germany. During the oil‐price crises of the 1970s and early 1980s, job losses could be contained through an expansion of nationalized industries and subsidies to private firms. This changed with the end of dirigisme in industry after 1983. Thereafter, early retirement was expanded to absorb the massive job losses caused by industrial restructuring. Since rising non‐wage labour costs impeded job creation in the private services, the government has shifted part of the burden to a special income tax, whereas attempts by successive governments to reduce the generosity of welfare benefits were typically blocked by large‐scale public protests.

Keywords: Bismarckian welfare state; dirigisme; early retirement; France; industrial restructuring; nationalized industries; non‐wage labour costs; oil‐price crises; public protests; social security contributions

Chapter.  18306 words.  Illustrated.

Subjects: Comparative Politics

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