French Unemployment Revisited

| Tue Apr. 25, 2006 4:24 PM EDT

A few weeks ago, I threw together some numbers and statistics suggesting that the French protesters might not be so misguided, and France-style labor protections might not cause high unemployment after all. Now David Howell and John Schmitt of EPI have a new paper getting into this in more depth.

The super-novel point here is that France's youth unemployment-to-population ratio (8.6) is actually nearly identical to that in the United States (8.3). France's "official" youth unemployment rate is higher primarily because very few French students enrolled in school actually work, while a lot of our college kids get jobs, so the ratio of unemployed youths to working youths is higher in France than it is here. Different numbers measure different things.

Now why do so few French high school and college students work? Maybe it's because they can't find jobs. Or maybe it's because they don't need to—their public universities are more heavily subsidized, after all. Interestingly, though, the percentage of 20 to 24-year-olds who aren't in school and are unemployed is actually a bit lower (14.1) than it is in the United States (14.4). That seems like the main number to worry about, and France seems to be doing okay on that front.

It's also worth noting that the share of young French adults still enrolled in education is much higher than it is in the United States (51.1 versus 35.0 percent). Again, whether that's because French kids like school or because they have no other options is up in the air. But even if it's because they have no other options, perhaps being "forced" to stay in school isn't so bad: According to OECD data, French workers are, on average, 6 to 16 percent more productive than American workers. Work less; study more—maybe that's the way to go.