Jean Pisani-Ferry offers insight into French President Macron’s labour market reforms.
WorldPost: Some have referred to Macron’s labour reforms as adopting the so-called “Nordic model” in France. That model entails a less rigid, more liberalised labour market in terms of hiring and firing to accord with market dynamism but a stronger safety net for those whose employment has been “disrupted” — something that will become more common in the perpetually innovating, knowledge-driven economy of the future. Can you describe the key elements of the reform and their aims?
Jean Pisani-Ferry: That is a fair characterisation. The reforms currently under discussion combine a broadening of the access to unemployment insurance that would eventually turn it into a universal safety net for all those suffering an income drop as a consequence of economic disruption, irrespective of their status. Furthermore, it should be accessible, under certain qualifying criteria, to employees who have resigned from a job to look for another one.
In the traditional French system, unemployment insurance is reserved for employees who have contributed for a minimum period. It is a sort of mandatory insurance and is attached to the wage-earner status. Such an approach is increasingly outdated in the gig economy: a growing number of people move from employee to independent status and back, or they combine different statuses at the same time. Hence the need for universalisation and its corollary, strict eligibility conditions.
So these reforms involve a change of philosophy. If successful, they may put us on track toward an economy that combines flexibility and worker protection ...