EcoFlash

The French labour market: outlook for 2021

ECO FLASH  
N°21-09  
7 May 2021  
THE FRENCH LABOUR MARKET: OUTLOOK FOR 2021  
Hélène Baudchon  
Employment and the jobless rate are both  
UNEMPLOYMENT RATES IN FRANCE AND THE UNITED STATES  
of the labour force  
expected to rise in 2021, but the size of these  
movements is very uncertain. The rise in  
employment is likely to be limited, while the  
upturn in the jobless rate risks being big.  
%
5
1
14  
France  
United States  
13  
1
2
The France Relance recovery plan will surely  
help boost employment. Uncertainty over the  
size of its rebound is linked in part to the vigour  
of the economic recovery.  
11  
10  
9
8
7
6
5
4
3
Above all, employment recovery will be  
hampered by several headwinds: the lagged  
impact of the GDP plunge in 2020, the increase  
in corporate bankruptcies, persistent sector  
differences, the return to work of furloughed  
or short-time workers, and corporate efforts to  
restore productivity gains and margins.  
97  
99  
01  
03  
05  
07  
09  
11  
13  
15  
17  
19  
21  
CHART 1  
SOURCE: INSEE, BLS, BNP PARIBAS  
1
After a stand-out performance in 2019 , the French labour market’s performance was even more  
remarkable in 2020 given the massive recessionary shock that swept the French economy. In  
part 1 of this article, we conducted a review of this very peculiar year in which the Covid-19 crisis  
As to the unemployment rate, the dynamics  
of employment and the labour force are both  
uncertain. There is also the question of the  
profile of the increase in the jobless rate in 2021.  
Will it be a continuous increase or a bell-shaped  
curve? The most likely scenario is the first one,  
with a sharper increase in the first half that  
eases in the second half.  
2
had a much smaller impact on the French labour market than on GDP growth .  
What should we expect in 2021? Will the labour market continue to surprise on the upside?  
Although we cannot rule out this possibility, for now, prospects seem to be more mixed. Payroll  
employment is expected to rebound, but the unemployment rate is also expected to pick up.  
And the size of these moves is highly uncertain. To be more precise, the balance of risks leans  
towards a mild increase in employment and a big rise in the jobless rate. This article will review  
the support factors and headwinds currently at work.  
PAYROLL EMPLOYMENT IS SET TO REBOUND, BUT BY HOW MUCH?  
Concerning the outlook for employment, there can be little doubt but that the situation is poised  
for a rebound in 2021. The big question is by how much? We can reasonably expect the year-on-  
year increase to be positive by the end of 2021. But will employment rebound sufficiently over  
the course of the year to return to pre-crisis levels by year-end 2021? Will the annual average  
growth rate swing back into positive territory? This would already be a significant improvement.  
Will it be strong enough to close the gap with job destructions in 2020 (when payroll job des-  
tructions averaged 328k)? Although we can answer the first two questions in the affirmative, the  
third hypothesis seems highly unlikely.  
The French labour market is unlikely to return  
to good health in 2021 (as defined by the  
government in its unemployment insurance  
reform), but the year 2022 seems like a more  
realistic horizon.  
1
2
EcoFlash, France: stand-out labour market performance in 2019, n°2, 28 February 2020  
EcoFlash, The French labour market: 2020 in review, n°6, 30 March 2021  
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world  
Eco Flash 21-09 // 7May 2021  
economic-research.bnpparibas.com  
2
Government forecasts clearly illustrate the different messages circula-  
ting with these figures, depending on whether they are presented year-  
ESTIMATED IMPACT OF REFORMS ON EMPLOYMENT  
3
on-year or as the annual average . In 2021, the most positive signal is  
from the year-on-year change in employment, whereas in 2022 it is the  
annual average increase. The government’s forecasts are summarised  
in Table 1: the most recent figures are from the April 2021 edition of  
the Stability Programme, while the others are part of the 2021 budget,  
published in October 2020. This table also illustrates how employment  
surprised favourably in 2020: year-on-year job losses were a little over  
half the size previously expected. The more limited employment fall in  
Thousands (excluding financing)  
Tax measures  
490  
4
60  
500  
PACTE  
OO% Health Reform  
PIC  
4
00  
1
400  
350  
Unemployment insurance*  
Work orders**  
Total effect  
260  
300  
2
020 translates into a more limited rebound in 2021 on a year-on-year  
200  
130  
basis, in the most recent forecasts for the Stability Programme. Since  
the negative carry-over was smaller, however, the 2021 annual average  
increase swung into positive territory, albeit slightly.  
100  
40  
0
The reason why we expect to see a mild rebound in employment in  
2
021 is because there will be fewer and less strong tailwinds than  
-100  
headwinds. Among the support factors, there is of course the expec-  
ted rebound in growth. There are also the specific positive effects of  
the youth employment plan, and more globally, of the France Relance  
recovery plan (+240,000 jobs by 2022 and +120,000 in the long term,  
according to government estimates presented in the Economic, Social  
and Financial Report as part of the 2021 budget). There is also the im-  
pact of the reforms already underway (see chart 2). Yet caution is still  
needed given the high uncertainty over the vigour of the recovery, the  
impact of support measures and the job-rich content of the recovery.  
However, Pôle emploi’s 2021 survey on companies’ labour need, re-  
leased early May, sends an encouraging signal, with 2.72 million hiring  
2018  
2019  
2020  
2021  
2022  
2025  
2027  
CHART 2  
SOURCE: FRENCH TREASURY (STABILITY PROGRAMME APRIL 2021), BNP PARIBAS  
* The assessment does not take into account the new timetable for the unemployment  
insurance reform. It was compiled based on the reform’s initial terms and timetable.  
*
* We took into account the measures concerning stop-work orders and other job  
protection measures. Their impact can only be seen over the long term. Prior to 2027,  
their impact is highly uncertain, and it has not been included herein.  
GOVERNMENT FORECASTS FOR EMPLOYMENT  
IN THE NON-FARM MARKET SECTOR  
2
021  
Stability plan  
2021  
Budget  
4
plans, or 30,000 more than in 2019 .  
2
2
020  
021  
Year-on-year  
Annual average  
Year-on-year  
-352,000  
-750,000  
-395,000  
+325,000  
-125,000  
AFTER A LIMITED DECLINE, A MILD REBOUND?  
-258,000  
+100,000  
+15,000  
The job content of growth is likely to be limited by corporate efforts  
to rebuild productivity gains and margins. Considering the deteriora-  
tion in both variables due to the Covid-19 crisis, we can imagine that  
substantial efforts will be made to close the gap. The bigger the effort,  
however, the smaller the rebound in employment.  
Annual average  
Year-on-year  
The job content of growth will also be limited by the return to work of  
furloughed or short-time workers. Job-retention schemes have proven  
to be an effective way to contain job destructions in the face of the  
massive recessionary shock. This effectiveness is good news, although  
it does raise a few questions. By limiting job destructions during the  
crisis, to what extent will it also limit job creations during the recovery  
phase? Is this trade-off preferable to the contrary, as is the case in the  
United States, where the labour market is left on its own and flexibility  
is allowed to run its course, resulting in more job losses followed by  
more job gains.  
2022  
+145,000  
+220,000  
Annual average  
TABLE 1  
SOURCE: FRENCH GOVERNMENT, BNP PARIBAS  
American laissez-faire also has its limits. Job creations since May 2020  
have certainly been impressive (14 million new jobs), but the shock of  
the crisis was so big that there is still a substantial shortfall of jobs (in  
March 2021, employment was still down by 8 million jobs compared  
to pre-crisis levels, and only 63% of job losses had been recouped).  
And we are only speaking about the return to pre-crisis levels, and not  
to the pre-crisis trajectory. The US unemployment rate is still nearly  
points above pre-crisis levels (see charts 1 and 2). The participation  
rate has also declined. In France, by comparison, there was still a de-  
ficit of about 300,000 payroll jobs in Q4 2020 compared to Q4 2019,  
As to France, the answer – without much hesitation – is positive:  
job retention measures preserve human capital and are preferable,  
especially given the functioning and rigidity of the French labour  
market. According to the IMF (2021), regardless of the country, there  
can be no doubt about the effectiveness of job retention measures in  
3
5
buffering the shock of the Covid-19 crisis and its scars on employment .  
6
0
0% of job losses had been recovered, and the unemployment rate was  
.1 points lower than the pre-crisis level.  
5
IMF, Recessions and Recoveries in Labour Markets: Patterns, Policies, and Responses to the Covid-19 Shock, World Economic Outlook, Chapter 3, April 2021  
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3
To buffer household income from the shock of the crisis, and lacking  
the same automatic stabilisers, the American fiscal response has been  
very different from the French one. In France, household income was  
preserved via employment, through the massive use of furlough or  
short-time work schemes. In the US, it was preserved through a big  
increase in unemployment benefits and through the direct distribution  
NON-FARM PAYROLL EMPLOYMENT IN FRANCE AND THE UNITED STATES  
Millions  
25.4  
5.2  
5.0  
4.8  
4.6  
155  
150  
France (LHS)  
United States (RHS)  
2
6
of stimulus checks . Although the amount of funds injected by the US  
2
Government is truly impressive, it nonetheless raises questions about  
the results. Did they live up to the amounts invested? Based on the  
first series of US and French measures, Cohen-Setton and Pisani-Ferry  
1
45  
140  
35  
2
2
(
2020) respond in the negative: in terms of their effectiveness, France’s  
7
package offered a bigger bang for the buck .  
24.4  
24.2  
1
Turning back to the headwinds, we must also take into account the  
lagged effect of the massive recessionary shock of 2020, the extra  
costs of the Covid-19 crisis, and the impact of the expected increase  
in the number of bankruptcies, one of the scars of the crisis. The OFCE  
130  
125  
2
4.0  
23.8  
2
007  
2009  
2011  
2013  
2015  
2017  
2019  
2021  
(
2020a) estimates that bankruptcies will result in 180,000 payroll job  
8
destructions in 2021 , a figure that corroborates with the one proposed  
by Banerjee et al. (2020) for all of the developed countries. According  
to this study, a crisis has a much bigger impact on the labour market  
CHART 3  
SOURCE: INSEE, BLS, BNP PARIBAS  
9
when it is accompanied by corporate bankruptcies similar in scope .  
BREAKDOWN OF PAYROLL EMPLOYMENT TRENDS BY FACTOR  
(‘000S, YEAR-ON-YEAR AT END OF YEAR)  
Banerjee et al. also found that unbalanced recessions (i.e. in which  
corporate bankruptcies are concentrated more in certain sectors) tend  
to be longer and deeper, and to have a more negative impact on the  
labour market. The Covid-19 crisis, with its wide disparities in sector  
impact, fits this description.  
Year-end  
020  
Year-end  
2021  
2
Payroll employment – Total net effect  
Impact of economic growth  
-790  
-2 502  
-199  
-3  
The rebound in payroll employment is also likely to be hampered by  
the fact that the services that were hit hardest by the crisis (hotels  
1,587  
35  
&
restaurants, leisure services, transport services) are also major  
Sector structural effect  
employers (15% of total employment in 2019 for 10% of gross value  
added). Once the health restrictions have been lifted for good, we can  
certainly imagine that business and hiring will pick up rapidly. For this  
to happen, however, the number of corporate bankruptcies must re-  
main contained (and/or new companies must rapidly replace the fai-  
ling ones) and companies must be able to easily hire the necessary  
workers. This is far from certain.  
Effect of prophylactic measures  
Effect of job retention measures  
Furlough or short-time work schemes  
200  
-150  
-1,341  
-1,390  
1,719  
1,636  
Other (subsidised jobs, state-backed contracts  
for youth, civil service contracts, work/study pro-  
grammes, hiring bonus)  
Lastly, there is also the more global question of whether certain  
business models need to be called into question in a post-crisis world  
marked by the challenges of climate change. Crises are certainly  
catalysts for change – for creative destruction – which eventually has  
a net positive effect on employment. Yet Banerjee et al. point out that  
for that to happen, the reallocation of human capital and reskilling/  
upskilling efforts must proceed rapidly and effectively. Although the  
French government has launched measures along these lines, their  
impact will only come into play over the long term. The year 2021 does  
not provide enough of a timeframe to judge whether these measures  
83  
49  
Effect of bankruptcies  
0
-180  
45  
Non-market employment  
-8  
TABLE 2  
SOURCE: OFCE (2020B), BNP PARIBAS  
will be sufficient or effective. And in any case, we must be vigilant that Yet these figures must be kept in perspective since the estimates date  
they actually bear fruit.  
from late 2020 and do not include Q4 2020 data. The situation was  
not as bad as expected, with 284k payroll job losses compared to the  
year-earlier period (vs estimates of 790k). Even if the net impact is still  
zero, using a less negative starting point brings us into positive terri-  
tory in 2021, which is symbolically important. The estimated impact of  
job support measures in 2021 is probably too low as well.  
To summarize, Table 2 lists most of the factors mentioned above and  
shows their expected impact on employment as estimated by the OFCE  
1
0
(
2020b) . With virtually no net impact at year-end 2021, the message  
is not very optimistic.  
6
7
8
9
See Jean-Luc Proutat, United States: does the American Rescue Plan go too far? EcoFlash 21-05, March 2021  
Jérémie Cohen-Setton and Jean Pisani-Ferry, When More Delivers Less: Comparing the US and French Covid-19 Crisis Responses, PIIE policy brief n°20-9, June 2020  
Eric Heyer, 2020(a), Corporate bankruptcies and job destructions – An estimate of the relation using macro-sectorial data, OFCE Review, n°168, October  
Two years after the crisis, the increase in the unemployment rate is three times higher (Ryan Banerjee, Enisse Kharroubi and Ulf Lewrick, Bankruptcies, unemployment and  
reallocation from Covid-19, BIS Bulletin, n°31, 9 October 2020).  
1
0 OFCE, 2020(b), Evaluation at 11 December 2020 of the economic impact of the Covid-19 pandemic on France and the outlook for 2021, Policy brief n°81, 11 December; Bruno  
Ducoudré and Eric Heyer, 2020(c), How will employment rebound in 2021?, OFCE blog, 18 December  
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4
The negative impact of “short-time work schemes” will not be as big  
because the programme was extended, preserving more jobs. “Other  
factors” are also likely to have a bigger positive impact, since some of  
the estimated measures have since been reinforced. We can also add  
in other existing measures that support employment.  
TWO NEW GAUGES TO ASSESS THE HEALTH OF  
THE FRENCH LABOUR MARKET  
The two spreads read in the same direction:  
a positive (negative) difference is a good (bad) sign  
0.6  
.4  
0
UNEMPLOYMENT: HOW HIGH SHOULD IT BE EXPECTED TO 0.2  
0
.0  
RISE?  
-
-
-
-
-
-
0.2  
0.4  
0.6  
0.8  
1.0  
1.2  
As to the unemployment rate, there are two sources of uncertainty  
concerning the size of its rise in 2021. There is uncertainty over the  
size of the rebound in employment but also in the labour force. The  
unemployment rate could rise sharply under the combined impact  
of a limited rebound in employment and a big upturn in the labour  
force. The labour force could swell as discouraged workers and those  
prevented from actively seeking work during the crisis – especially  
during the lockdowns – return to the labour market.  
Difference between hiring reports for jobs lasting more than 1 month  
(sum over 4 months, millions) and the gauge of 2.7 millions  
Difference between the -130k gauge and the 6-month change in the  
number of category A job seekers (millions)  
06  
07 08 09 10 11 12 13 14 15 16 17 18 19 20 21  
The ranks of the unemployed (as well as the number of corporate  
bankruptcies) are also likely to grow once emergency measures have  
been lifted, especially short-time work schemes. There is reason to  
hope, however, that this increase will be limited, since the emergency  
measures will not be withdrawn until economic conditions are  
ripe. This should reduce the risk of a surge in unemployment (and  
bankruptcies). Moreover, support will be withdrawn gradually, and it  
will not be withdrawn entirely thanks to the introduction of a new  
long-term furlough scheme (see table and box below for a summary of  
the changes made to short-time work schemes and a summary of other  
measures to bolster the labour market).  
CHART 4  
SOURCE: INSEE, BLS, BNP PARIBAS  
*
****  
To conclude, mixed labour market prospects make 2021 a transition  
year: compared to 2020, there should be a definite improvement on  
the employment front but not in terms of the unemployment rate,  
while bigger improvements are expected on both fronts in 2022.  
These points can be illustrated with a few figures. In mid-April, we To determine when the French labour market has returned to good  
estimated that the unemployment rate would rise to 9.4% in Q4 2021, health, we can use the two gauges retained by the French government  
and to an average annual rate of 9.1%, which is a relatively big increase in the unemployment insurance reform: 1/ the number of category A  
(
+1.4 points compared to Q4 2020, +1.1 point compared to 2020). Our jobseekers must decline by at least 130,000 in 6 months; and 2/ hiring  
forecast is lower than the April 2021 consensus forecast (9.4%; with a reports for jobs lasting more than 1 month (excluding temporary work)  
1
1
forecast range of 8.4% to 10.7% ), but slightly higher than the Bank must exceed a 4-month moving average of 2.7 million contracts. In  
of France’s March 2021 forecast (average annual unemployment rate chart 4, the two variables are expressed as the differential from their  
of 8.9%) and the IMF’s April 2021 forecast (expected average rise of corresponding benchmark. The two spreads read in the same direction:  
0
.9 points).  
a positive spread is a good sign and a negative one is bad.  
In addition to the size of the increase in the jobless rate in 2021, Judging by the available data since 2006, the French government  
there is also the question of its profile: will the jobless rate increase seems to have set the bar very high: the two criteria have never been  
continuously over the course of the year or will it be hump-shaped? A met at the same time. The peak in October 2020 does not count. The  
bell-shaped profile seems to be preferable since it would signify that positive signal is purely artificial and ephemeral because it is based on  
the unemployment rate had begun to decline by the end of the year. a favourable basis effect. The labour market situation was by no means  
Yet it also depends on the shape of the hump, whether it is flatter or healthy at the time, and was still crippled by the Covid-19 crisis. The  
more acute, reflecting a lower or higher peak in the unemployment threshold was almost reached in early 2020, prior to the Covid-19  
1
3
rate. This brings us back to the question of the size of the rise. For the shock. Without the crisis , it is highly probable that the situation  
1
2
moment, these questions cannot be answered . In terms of probability, would have continued to improve, and the government’s target would  
we would say that the most likely scenario is a continuous rise in the have been reached. But everything changed with the onslaught of the  
unemployment rate, that is steeper in the first half and that eases in Covid-19 crisis. By when can we now expect to see the French labour  
the second half.  
market return to good health? The year 2021 seems like an improbable  
horizon, although it could be envisioned in 2022.  
1
1
Consensus forecasts are based on the unemployment rate in metropolitan France. We have increased the consensus by the historical average differential with the unemploy-  
ment rate for all of France, which is 0.3 points.  
12 We leave aside the debate about the increase in France’s structural unemployment rate due to the Covid-19 crisis. An increase is likely given the massive recessionary shock.  
But we believe it is too early to judge in 2021 and there is also the possibility that a rise in the structural unemployment rate will be avoided, thanks to emergency and stimulus  
measures and the impact of past reforms.  
1
3 And assuming there were no other shocks, which is not a given considering the downside risks to global growth at that time.  
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JOB PRESERVATION AND SUPPORT MEASURES  
Employee compensation (% of gross wage)  
Employer allocation (% of benefit paid to employee)  
Flat rate  
Duration  
6 months renewable  
12 months renewable  
Short-time working pre-crisis  
Prior to 1 June 2020  
70%; minimum at net SMIC  
70%; minimum at net SMIC  
100%; up to 4.5xSMIC; minimum at €8.03  
Companies legally required to close  
From 1 June  
020  
or with 80% loss of revenue and  
70%; minimum at net SMIC  
70%; minimum at net SMIC  
100%; up to 4.5xSMIC; minimum at €8.03  
1
2 months renewable  
2 months renewable  
2
protected sectors  
Unprotected sectors  
85%; up to 4.5xSMIC; minimum at €8.03  
Companies legally required to close  
or with 80% loss of revenue  
1
00%; up to 70% of 4.5xSMIC; minimum at €8.11  
From 1 April  
021  
70%; up to 70% of 4.5xSMIC; minimum at net SMIC  
1
2
Protected sectors  
85%; up to 60% of 4.5xSMIC; minimum at €8.11  
60%; up to 36% of 4.5xSMIC; minimum at €7.30  
100%; up to 70% of 4.5xSMIC; minimum at €8.11  
Unprotected sectors  
60%; up to 60% of 4.5xSMIC; minimum at net SMIC  
70%; up to 70% of 4.5xSMIC; minimum at net SMIC  
Companies legally required to close  
or with 80% loss of revenue  
From 1 May  
021  
12 months renewable  
2
Protected and unprotected sectors  
From 1 July 2021  
60%; up to 60% of 4.5xSMIC; minimum at net SMIC  
60%; up to 60% of 4.5xSMIC; minimum at net SMIC  
60%; up to 36% of 4.5xSMIC; minimum at €7.30  
60%; up to 36% of 4.5xSMIC; minimum at €7.30  
3
months renewable  
(
6 months max over 12 months)  
From 1 July  
020  
Protected sectors and related  
Other sectors  
70%; up to 70% of 4.5xSMIC; minimum at net SMIC  
70%; up to 70% of 4.5xSMIC; minimum at net SMIC  
100%; up to 70% of 4.5xSMIC; minimum at €8.11  
85%; up to 60% of 4.5xSMIC; minimum at €8.11  
6 months renewable  
(2 years max over 36 months)  
2
Companies legally required to close  
or with 80% loss of revenue  
1
00%; up to 70% of 4.5xSMIC; minimum at €8.11  
From 1 April  
021  
70%; up to 70% of 4.5xSMIC; minimum at net SMIC  
6 months renewable  
(2 years max over 36 months)  
2
Protected sectors  
Unprotected sectors  
85%; up to 60% of 4.5xSMIC; minimum at €8.11  
85%; up to 60% of 4.5xSMIC; minimum at €7.30  
Companies legally required to close  
or with 80% loss of revenue  
Protected and unprotected sectors  
From 1 May  
021  
70%; up to 70% of 4.5xSMIC; minimum at net SMIC  
70%; up to 70% of 4.5xSMIC; minimum at net SMIC  
100%; up to 70% of 4.5xSMIC; minimum at €8.11  
85%; up to 60% of 4.5xSMIC; minimum at €7.30  
85%; up to 60% of 4.5xSMIC; minimum at €7.30  
6 months renewable  
2
(2 years max over 36 months)  
6
months renewable  
From 1 July 2021  
(
2 years max over 36 months)  
Numerous measures were adopted to limit the impact of the Covid-19 crisis on the economy in general and the labour market in particular. One of  
the most important measures was to bolster short-time work schemes. The table presents the various changes that were made and illustrates the  
increase in government support and the extension of the terms of compensation. To address the more durable decline in activity in certain sectors, a  
long-term short-time working status was also introduced, which was conditioned on reaching a collective bargaining agreement.  
In addition to these job retention measures aiming to safeguard jobs and preserve human capital, direct support measures were also introduced to  
help young people join the workforce (1-youth, 1-solution job insertion plan). Starting on 1 August 2020, a company that hires someone under the age  
of 26 with a job contract of more than 3 months benefits from a EUR4000 reduction in charges. Initially expiring on 31 March 2021, this measure was  
extended by two months (up to 1.6x the minimum wage, and no longer 2x). Major bonuses were provided to support apprenticeship and vocational  
training contracts (EUR5000 for youth under age 18, EUR8000 for older work/study participants). These bonuses started in July 2020 and will run  
through 31 December 2021. New training programmes were created to orient and train 200,000 young people to help them enter the sectors and  
professions of the future. Young people with the lowest employability will benefit from 300,000 customised job insertion paths.  
Supporting employment lies at the heart of the France Relance plan: in addition to the direct measures of the “1-youth, 1-solution” plan (social  
cohesion segment), measures to boost corporate competitiveness and facilitate the energy transition, and more generally, the plan’s efforts to fuel  
growth, should be key drivers of employment.  
Precarious workers are supported through exceptional monthly financial aid of EUR900. Available from November 2020 to May 2021, this aid is means  
tested (gross monthly income of less than EUR 900) and conditioned on labour market participation (recipients must have worked at least 138 days  
in 2019, including more than 70% as part of short-term contracts).  
As to unemployment insurance, the benefits of jobseekers reaching the end of their rights were extended during the lockdown periods, through  
3
0 June 2021. The application date was modified for the 2019 reform calling for tighter eligibility requirements for unemployment benefits. Initially  
the contribution period was to be extended from 4 to 6 months over a 24-month period, but the conditions were eased by introducing a benchmark  
interval extended by the duration of the lockdown. For jobseekers under age 57 with gross monthly income of more than EUR 4500, the 30% digression  
of benefits after 6 months was revised to 8 months as of 1 April 2021. Both of these measures will be tightened according to the initial terms of the  
2
019 reform once two conditions will have been met: 1) the number of category A jobseekers declines by 130,000 over 6 months, and 2) hiring reports  
of more than 1 month (excluding temporary work) has exceeded 2.7 million contracts over a moving average 4-month period. As to chart 4, it will not  
be easy to meet the conditions for returning to a healthy job market. The new calculation of jobless benefits (which calls for benefits to be the same  
for the same number of hours worked) will apply as of 1 July, although a more watered-down version will be used to avoid an overly sharp reduction  
in benefits for the most precarious workers. A bonus-malus system for employer unemployment contributions was introduced to combat the abusive  
use of short-term contracts, but its start-up has been postponed until 2022.  
*
Based on information available as of 25 March 2021. Sources: daily press, the French government. BNP Paribas Box written by Julie Bouvry (intern).  
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