Eco Flash

French labour market: keeping the momentum


In France, the year 2021 ended with the highest employment rate since the 1970s, the lowest jobless rate since 2008, and a record number of job creations since the Second World War. Half of the labour market’s dynamic momentum can be attributed to the rebound in job creations in the sectors hit hardest by the Covid-19 crisis (notably catering and temporary employment services). The pandemic has also bolstered employment in healthcare and education. Yet the private market sector still bears the marks of the health crisis: employment is 1.3% below the level that it would have reached had the growth rates observed in 2017-19 continued through the end of 2021 (using the same calculation method, real GDP growth is still lagging by 2.2%). The employment rate for the 15-64 age group rose to 67.8%. This increase is mainly due to the employment rate for the 50-64 age group (later retirement age). The recent improvement in the employment rate for the 15-24 age group must still be confirmed. Wage growth has been moderate in recent years but should accelerate in 2022 under the combined impact of a declining unemployment rate and higher inflation.

Looking at the job market situation in France at the end of 2021, the shock created by the Covid-19 pandemic already seems to have been partially absorbed (chart 1). Far from a prolonged increase in unemployment, the jobless rate has begun to fall again: at 7.4% at year-end 2021, it is even lower than the pre-Covid level of 8.1% at year-end 2019. As a result, the jobless rate is now near the Q1 2008 low of 7.2%. At the same time, the employment rate also began rising again: at 67.8% at year-end 2021, it is the highest since the 1970s and nearly 15 points higher than the low of 1994. Job support measures, especially job retention mechanisms, largely neutralised the impact of lockdown measures and helped preserve jobs.


France: employment and unemployment rate (% of active population)

Between 2017 and 2019, the job market was robust with nearly 760,000 job creations. The pandemic reversed this momentum for a few quarters, but only temporarily. Nearly 370,000 jobs were destroyed in 2020, but 700,000 new jobs were created in 2021 (based on a comparison of employment figures at year-end 2020 and year-end 2021). This labour market momentum was unprecedented, with nearly 640,000 job creations in the private sector.

Nearly half of the private sector’s performance was in sectors hit hardest by the Covid-19 pandemic in 2020: temporary employment services, accommodation & catering services, and to a lesser extent, the entertainment industry (chart 2). Excluding these three sectors, the private sector reported 324,000 job creations, which falls short of the 428,000 job creations reported in the record year 2000.

France: net job creations in the private sector

This raises another question: Did the post-Covid rebound erase the shock’s impact on the labour market? In other words, did employment reach the levels that would have prevailed at year-end 2021 if the job creation trends observed in 2017-19 had continued?

Based on this comparison, the level of employment in the non-market services sector was 135,000 jobs higher, including 76,000 more jobs in the public sector. This trend was most striking for healthcare and education, since the pandemic has a positive impact on employment in these sectors.

France: job levels compared to pre-Covid trends

In contrast, there was a shortfall of nearly 260,000 jobs in the private market sector, excluding temporary employment services (chart 3). In industry, the shortfall of nearly 60,000 jobs is in keeping with the cutbacks in production capacity observed during the Covid period.

Yet the biggest shortfall from the levels that would have been reached if pre-crisis trend would have continued was in the market services sector, where employment was down by nearly 200,000 jobs, a third of which were in accommodation & catering services, a quarter in business services, and a sixth in transport and warehousing. In contrast, in agriculture and construction, employment levels are relatively in line with the levels that would have prevailed without the pandemic.

The breakdown of temporary employment services by business sector does not change the trends observed in chart 3, except in industry. After taking this into account, the shortfall in employment is reduced by half, especially in the chemicals, pharmaceuticals, iron & steel and agri-food industries.

All in all, private market sector employment was 1.3% below the level that would have prevailed at year-end 2021 if pre-Covid growth rates had been maintained. In comparison, using the same methodology, real GDP was 2.2% below its theoretical level.


France’s employment rate is still 1.5 points lower than the European average, mainly due to later entry into the labour market and an earlier retirement age. Yet significant progress has been made in both of these areas.