Nicolas Fremeaux- Postdoctoral Fellow at THEMA of the Université de Cergy-Pontoise, F-95011, 33, blvd du Port, Cergy-Pontoise, France; E-mail: nicolas.fremeaux@u-cergy.fr

Abstract

The article discusses trends and causes of inequality in France and possible ways of reducing inequality. It is demonstrated that income and wealth inequality are growing over the last decades. The increase in income inequality in France occurred later than in many developed countries. Income inequality, as measured by the Gini coefficient, has followed a U-shaped curve over the period 1980-2010. More specifically, income inequality has decreased during the 1970s and 1980s. Then, after a period of stability in the early 1990s, inequality has started to rise. Thus, the levels of income dispersion in 1980 and in 2010 are very close. France was above the average level of income inequality in OECD countries during the 1970s and the 1980s. At the end of the 2000s, the country was just below the average (0.30 for France against 0.314 for OECD countries).

According to the author one of the causes of inequality is a non-progressive tax system when more affluent residents pay fewer taxes than the poor. Labour market inequality is also observed in France. Inequality leads to declining living standards of low-qualified workers. The analysis of various social factors that affect inequality revealed that it is not possible to define explicitly their role in inequality increase.

To reduce inequality it is suggested to introduce a more transparent and simple tax system, implement effective social and education policies with the focus on young people living in disadvantaged areas. Finally, an effective labour market policy should be launched to stimulate job creation.