Croissance et emploi : l'ambition d'une initiative européenne

Abstract

[eng] Growth and employment the scope of an European initiative Jacques Drèze, Edmond Malinvaud et Alii Executive Summary 1. Since almost twenty years now, European unemployment is a major social problem and the sign of significant underutilisation of resources at a time of substantial unfilled needs. Whereas employment increased by nearly 6 % between 1987 and 1990 in EC12, the rate of employment is now again exceeding 10 % and rising. Even under reasonably optimistic forecasts (a growth rate of 2.5 to 3 %), the unemployment rate will remain above 10 % for at least four or five years. This position paper reviews the short-, medium- and long-run policies best susceptible of promoting growth and employment in Europe. 2. We argue that fiscal policy is not, at this time, a suitable instrument of short-run stabilisation. Attention should rather be focussed on medium-term structural budget consolidation, which was neglected during the expansion of the late eighties. On the other hand, we argue for monetary stimulation through a strong decrease of short-term interest rates, and propose the reference level of zero short-term real interest rates. 3. Turning to medium-run policies, we advocate two sets of measures, concerning respectively labour costs and investment. 3. a We note that high unemployment is heavily concentrated among unskilled workers. Moreover, we find evidence of a trend in the skilll composition of labour demand, which contains a declining proportion of unskilled jobs. These considerations justify investment in training and education. We believe that they also justify immediate measures aimed at reducing the cost of unskilled labour relative to the cost of skilled labour and of capital. An important element of labour costs consists in taxes and social insurance contributions, which drive a substantial wedge — 30 to 50 % in the EC member countries — between the cost of labour to employers on the one hand, take-home pay or the social opportunity cost of unskilled labour on the other hand. We argue that the time has come to reduce that wedge, and we propose exempting minimum wages from employers' contributions to social security. This may be done either by collecting such contributions only on that part of all wages that exceeds minimum wages ; or by introducing an exemption amounting to 100 % of these contributions at the minimum wage level but decreasing linearly to zero at twice that level. The first measure is very costly — of the order of 3.2 % of GDP on average in EC12, with substantial country differences. The second measure is much less costly, rather like 1.2% of GDP. In either case, substitute resources should be allocated to the social security. The CO2 tax currently under consideration by EC countries (with estimated receipts of the order of 1 to 1 .3 % of GDP) is a natural source. Raising the ceiling on VAT rates is another source. There is room for country- specific measures. Econometric simulations of labour tax exemptions in France and Belgium must be regarded as imprecise. Generally, they co...

Carbon Taxation: A Tale of Three Countries

“…As the international negotiation proceeded in the 1990s, the focus was placed more on the design of the international climate regime, from Rio to Kyoto, and the associated institutions and instruments. However, in 1993 research performed by a former high-level civil servant (E. Malinvaud) mentioned the cost of a low qualification workforce as a cause of mass unemployment in Europe and the introduction of a carbon tax as a means to reduce labor costs [24]. This central issue was further explored by Bureau and Hourcade in a 1998 report for the Conseil d'Analyse Economique [25], and after twenty years it is still looming today.…”

La Stratégie de l’OCDE pour l’emploi est-elle adaptée à la France ?

“…En fait je pense que cette concomitance masque une forte ineffi cacité en France associée au niveau qui reste élevé du coût du salaire minimum. Il avait été suggéré (DRÈZE, MALINVAUD, et al, 1994) de consacrer les allégements de charge à réduire le coût du travail des peu qualifiés et modérer ainsi les effets du salaire minimum sur l'emploi. Mais la réduction du temps de travail, hors augmentation du salaire horaire net, aurait conduit à une baisse du salaire mensuel, et de fait une fraction des allégements a servi à augmenter le SMIC horaire net.…”