Increasing the participation rate of the working-age population is one way of ensuring the dynamism of economies with ageing populations. Accordingly, it constitutes one of the objectives of the Europe 2020 strategy adopted by the Member States after the 2008 crisis to boost growth. But how can participation in the labour market be increased? To answer this question, Jean Flamand analysed the evolution of the French labour force participation rate over the last thirty-five years according to three socio-demographic characteristics: gender, age and, for the first time, level of education. The result: unpublished retrospective and prospective results over a long period of time.
The trend increase in the participation rate of women in the labour force
Six out of ten women were active in the early 1980s; today the number has risen to three-quarters. Therefore, the gap in labour force participation rates between women and men narrowed by more than 70% over the period. Some inequalities,however, are hard to overcome: regardless of their level of education, women's labour force participation rate decreases with the number of dependent children. In 2018, the participation rate for men is still eight points higher than that of women among twenty-five to sixty-four year olds. The gap is also twice as large for "low" graduates as for higher education graduates.
Another original result: while the gap in labour force participation rates between women with higher education qualifications, and those without has fallen slightly over the last thirty-five years, Jean Flamand observes that this is the result of two contradictory trends: a reduction in this gap in the second half of the career, but an increase before that (in the twenty-five to thirty-nine age group).
For men, while the labour force participation rate of tertiary graduates has remained stable since the 1980s, that of low-skilled workers has fallen by six percentage points. The gap in participation rates between them even reaches a maximum of thirteen points today, compared with seven in 1983. This trend that is not specific to France, and can be explained in particular by the automation of production lines, and the collapse of industrial employment.
Since 1983, the trend in labour market participation in France has, therefore, been marked by a reduction in inequalities between women and men on the one hand, and by an increase in inequalities between men with higher education qualifications and those with "low qualifications" on the other.
Activity behaviours: determining variable
Generally, labour market participation is highest at median ages (thirty to-forty-nine years) and systematically higher among tertiary graduates. However, the working population has aged: the fifty to sixty-four age group now accounts for a third of the population. And access to higher education has become more democratic: more than one person in three is now a higher education graduate compared with one in ten in 1983. What effects have these socio-demographic changes had on the participation rate?
To answer this question, Jean Flamand analysed the change in the participation rate over the last thirty-five years, distinguishing between "structural effects" and "activity behaviour". Structure effects ("degree effect" and "age effect") measure the influence on the participation rate of changes in the labour force in terms of degree level and age. Once these structural effects are (statistically) "neutralized", the influence of "activity behaviour" can be measured, that is, the effect, at a given degree and age, of decisions to participate (or not) in the labour market alone.
In thirty-five years, the participation rate of twenty-five to sixty-four year olds has increased by 7.2 points, reaching 80.1% in 2018. Nearly all this increase (6.9 points) was due to "activity behaviour". The "diploma effect" (+2.3 points) is offset by the "age effect" (-2.1 points). In other words: higher education levels have offset the negative effect of demographic ageing on the participation rate.
What prospects for 2030?
According to INSEE projections, which extend recent trends, the activity rate of the twenty-five to sixty-four age group would increase by 0.2% per year to reach 82.1% in 2030. This increase would be mainly driven by a greater presence of older people in the labour market as a result of the pension reforms already undertaken.
Inequalities in access to the labour market would also remain marked: men, and higher education graduates (16% more numerous than in 2018), would still be more active in 2030 than women and "those with few qualifications". This persistence of a significant gap in labour force participation rates between women and men raises questions. The availability of skilled labour is, indeed, one of the long-term determinants of growth. However, women are more highly educated than men, and the distance is likely to increase. By 2030, 54% of working women will be graduates of higher education compared to 43% of men. Increasing participation in the labour market, therefore, requires, among other things, greater professional equality between women and men.