France, Social Portrait 2020 edition
The 2019 socio-fiscal reforms significantly increased disposable household income, primarily for those with an intermediate standard of living and those in employment
Flore Cornuet, Michaël Sicsic (Insee) Simon Fredon, Félix Paquier, Noémie Vergier (Drees)
Compared to a situation in which they had not been implemented, the new social and fiscal measures introduced in 2019 increased the standard of living of people living in mainland France by 0.8% in 2019 and by 1.0% once fully implemented, representing an increase in the standard of living of 250 euros per annum per person on average.
Over a full year, households having an intermediate standard of living (between the 3rd and 8th decile) made more substantial gains, from 300 to 340 euros per annum, as a result in particular of the reductions in housing tax, CSG (generalised social contribution) for retired people, and the tax and social security exemption in relation to overtime. Poor households made smaller gains, of between 160 and 280 euros per annum. For them, the freezing and under-indexing of social benefits were more than offset by the adjustment to employment premium (prime d’activité) and, to a lesser extent, the reduction in housing tax and the adjustments to the statutory minimum available to the elderly and disabled. The increase in the standard of living brought about by the socio-fiscal measures was marginal for the wealthiest 10% of people, notably as a result of the increase in contributions brought about by the merger of the supplementary pension schemes Agirc and Arrco.
The measures introduced in 2019 primarily benefited households where the reference person was in employment (exemptions relating to overtime, adjustment of employment premium (prime d’activité)). They played a part in reducing poverty (-0.2 points) and inequalities.
Only direct levies were taken into account in measuring standard of living. In 2019, as in 2018, tax on tobacco increased. By incorporating this measure, the overall impact of the 2019 fiscal and social measures on the population’s overall standard of living was limited to 0.8% over a full year assuming constant tobacco consumption. This increase in indirect levies penalised the whole population, but had a greater impact on the poorest proportionately to their standard of living.