Économie et Statistique n° 354 France's downturn in per capita GDP mainly reflects imperfect international comparisons - Qualifications and employability - Topography of business sectors based on inter-sector employee mobility - Household invertments in Europe

Economie et Statistique
Paru le : 01/11/2002
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France's downturn in per capita GDP mainly reflects imperfect international comparisons

François Magnien, Jean-Luc Tavernier et David Thesmar

Eurostat has been ranking France number twelve in Europe for per capita GDP since 1997, whereas it was in third place in 1992. This apparent slump in perfor-mance needs a great deal of qualifying. First of all, it is hard to separate out the Member States ranked around the European average, which reflects exactly how homogeneous the European countries' wealth is. Secondly, per capita wealth is calculated by adjusting hourly productivity by the actual time worked, the unemployment rate and the participation rate. France was among the leaders (fourth place) for the producti-vity of its workforce in 1999. However, higher unem-ployment and a lower participation rate offset this advantage and lost the country six places. Lastly, Euro-stat takes into account price differences between the countries (adjusting them using purchasing power par-ities (PPP)). This practice tends to narrow the wealth deviations and pushes France down one place further. The inaccuracy of the GDP estimates in terms of level makes the ranking even vaguer. The change in France's ranking in the 1990s confirms the limits of the PPP approach. The per capita GDP cal-culated by Eurostat from 1992 to 1999 suggests that France slid back compared with the European average. A comparison with the national accounts estimates made by the national institutes admittedly corroborates this decline, but shows its magnitude to be much smaller. The deviation between the two methods is due to the fact that the PPP approach evaluates French re-lative prices as much higher during this period. This overestimate of French inflation affected consumer prices from 1992 to 1996, and then affected construc-tion prices. It underscores the importance of improving the harmonisation of data used at European level.

Economie et Statistique
No 354
Paru le : 01/11/2002