Major

Economics

Advisor

Lardaro, Leonard

Advisor Department

Economics

Date

5-2011

Keywords

France, Labor, Youth Unemployment, Public Policy

Abstract

In the 1970s, the world began moving towards free market policies. Open borders, lower taxes, and market-based economies became more prominent as centrally planned governments declined in both number and significance. In order to participate in European trade and to enhance its global position, France also moved towards decentralization. French socialists became less concerned with centralized government, yet continued to preserve their strong national desire to protect French citizens. France experienced substantial growth in its employment costs during the 1980s. By the early 1990s, France introduced labor contracts that better defined the duration of employment. These contracts pressured French companies to hire people for undetermined periods of time. As a result of these contracts, French unemployment has remained significantly higher than that in the United States and other European countries since 1985.

France has enacted several policy measures, such as the 35-hour work week and more flexible working arrangements, in an attempt to restrain its unemployment problem. Most of these policies have had serious ramifications for French youths entering the labor market. Equipped with fewer skills, high school and college students often enter a job market that is flooded with older employees. The strikes of 2006, when the promise of an indefinite contract came under fire, reflected the grievances of students. Today, ‘la génération perdue’ faces increasing social costs for France’s aging population, little to no job creation, and a disproportionately higher rate of unemployment with no clear signs of improvement ahead.