OECD Employment Outlook 2026: France
Table of contents
These country notes provide an overview of the labour market situation in each country based on data from OECD Employment Outlook 2026. This edition has a special focus on geographic disparities in jobs and incomes.
The OECD labour market remains resilient, with employment and labour force participation rates at record highs (72.1% and 76.7% in Q1 2026 on average across countries, respectively) and unemployment low by historical standards (4.9% in May 2026). However, there are increasing signs of weakening, including rising unemployment in many countries, slowing employment growth, and easing labour shortages. Due to the new surge in energy prices, real wages are expected to fall in many countries.
In May 2026, the French unemployment rate was 8.2%, well above the OECD average of 4.9% (see figure below). At 0.6 percentage points (p.p.), its annual growth was among the highest in the OECD.
The employment rate has increased from 68.7% in Q1 2024 to 69.4% in Q1 2026, and labour force participation has increased from 74.3% in Q1 2024 to 75.6% in Q1 2026. These increases are primarily due to older workers.
Labour shortages are close to pre‑COVID‑19 levels, but remain higher than during the pre‑pandemic decade, for a number of structural reasons.
Since the pandemic, employment has been supported by strong labour hoarding in many OECD countries, including France – i.e. firms have preferred to adjust to negative shocks by retaining their staff while reducing working hours rather than cutting jobs. Labour hoarding has been declining in France but remains well above pre‑COVID‑19 levels. This could exacerbate the employment consequences of any strong economic downturn in the future, as firms would then be forced to let go the staff they have retained.
Before the new surge in energy prices, real wages in France had caught up with their early 2021 levels – in Q1 2026, they were the same as in Q1 2021 –, although real wages in France did not fall much during the post COVID‑19 inflation surge thanks to relatively contained inflation rates and dynamic wage re‑negotiations.
In the near future, the negative real wage effects of higher inflation should be moderated by a drawdown of historically high household savings and the indexation of the minimum wage to inflation. Assuming that the disruptions from the conflict in the Middle East are sizeable but limited to a relatively short period of time, real wage growth would be ‑0.1% in 2026 and 0.3% in 2027.
Regional disparities in labour market outcomes are large across the OECD. In over half of OECD countries, employment rates across small regions vary by more than 20 p.p. These disparities do not simply reflect differences in who lives where, but also in the economic opportunities that regions have to offer, and they translate directly into disparities in living standards.
In metropolitan France, regional disparities in employment rates are somewhat narrower than in most OECD economies: the gap between regions in the top and bottom quintiles of employment rates stands at 8.6 p.p., compared to an average of 11.4 p.p. across OECD countries where data are available (see figure below).
Still, where people live shapes their chances of finding work. In 2022, the latest year for which data are available at such granular geographical scale, the unemployment rate in the worst-performing Département, Pyrénées-Orientales, stood at 16.8%, more than twice that of the best-performing one, Cantal (6.9%).
High-value‑added service jobs in France are heavily concentrated in the capital region, Ile‑de‑France, where they account for 32.6% of regional employment. Other metropolitan and non-metropolitan Départements show much lower shares of such jobs.
Since the early 2010s, regional disparities in employment rates (expressed as a share of the national average) have narrowed by 10.3%, in line with most OECD countries. This reflects positive labour market developments in previously low-employment regions.
Regional labour market disparities translate into significant differences in household incomes across France. The median disposable income in the highest-income Département Paris is 1.6 times that of the lowest-income one Seine‑Saint-Denis; much of this gap reflects differences in labour market conditions.
Globalisation and digital technologies continue to reshape local labour markets across OECD countries, but the effects differ substantially across regions. Areas highly exposed to import competition from low-wage countries often face persistent manufacturing job losses, while regions exposed to digital technologies tend to experience stronger growth in non-routine and higher-skilled employment.
Regional exposure to import competition from low-wage countries increased substantially following China’s accession to the WTO in 2001 and the EU’s enlargement to Central and Eastern European countries (CEECs) between 2004-2007.
In France, low-wage competition, in particular from CEECs, is associated with persistent declines in manufacturing employment – largely offset by job gains in other sectors (see figure below). A region in the 80th‑90th percentile of regional trade exposure has lost about 270 000 more jobs in the manufacturing sector than a region with average exposure, but it has gained nearly 500 000 more jobs in other sectors. The loss of manufacturing jobs represents one twelfth of total manufacturing employment in France, which is similar as for Western Europe overall, and lower than in the United States (one in seven).
Changes in the composition of regional employment across sectors and occupations in response to structural changes are largely brought about by flows in and out of employment, while mobility between regions and sectors only plays a minor role (see figure below).
Non-compete clauses – contract terms that prevent workers from moving to a competitor or starting a competing business – and related contractual restrictions are widespread across OECD labour markets. They covered about 30% of workers in 2025, and are increasingly used beyond highly specialised jobs. While firms may use such clauses to protect trade secrets or investments, evidence suggests they can reduce job mobility, weaken wage growth, slow knowledge diffusion and undermine productivity growth.
In France, according to employers, between 19% and 27% of private‑sector employees are currently bound by a non-compete agreement, close to the average of 20% to 30% across the OECD countries (see figure below). Firms report an upward trend, suggesting growing reliance on contractual restrictions in the French labour market.
In France as in several other OECD countries, non-compete clauses have spread into parts of the labour market where the traditional justification – protecting sensitive information or high-value investments – appears weak: between 17% and 33% of workers with no access to confidential information nonetheless declare having signed a non-compete as well as between 17% and 31% of low-pay workers.
In addition, about 40% of surveyed firms report knowledge of either no-poaching, wage‑fixing, or both occurring within their industry compared to 48% on average across the surveyed countries.
Contact
Alexandre GEORGIEFF (✉ alexandre.georgieff@oecd.org)
Stéphane CARCILLO (✉ stephane.carcillo@oecd.org)
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The full book is available in English: OECD (2026), OECD Employment Outlook 2026: Geographic Disparities in Jobs and Incomes, OECD Publishing, Paris, https://doi.org/10.1787/7e710f54-en.
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