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A dash of data: Spotlight on French households

15 September 2015
by Guest author

Jennifer Ribarsky, OECD Statistics Directorate

Tableau de bord de données : le point sur les ménages français (article in French)

Economic growth (GDP) always gets a lot of attention, but when it comes to determining how people are doing it’s interesting to look at other indicators that focus more on the actual material conditions of households. Let’s see how households in France are doing by looking at a few indicators.

GDP and Household Income

Chart 1 shows how much seasonally adjusted GDP and household income have grown since the first quarter of 2007, before the start of the economic crisis, with this period representing the baseline value 100. For the most recent quarter, Q1 2015, GDP per capita, which adjusts GDP for the size of the population, increased 0.6% from the previous quarter. The index increased from 99.5 in Q4 2014 (just below the 2007 baseline) to 100.1 in Q1 2015, so only returning to the pre-crisis level of real GDP after more than 6 years below that level. Real household disposable income per capita increased strongly in Q1 2015, by 1.2%. The index increased from 101.1 in Q4 2014 to 102.3 in Q1 2015, and has remained close to or above the baseline since the beginning of the crisis).

The increase in households’ purchasing power in Q1 2015 was mainly driven by increases in compensation of employees and a fall in taxes paid by households. The drop in taxes and the slight drop in social contributions paid in particular by the self-employed as a result of the Responsibility and Solidarity Pact were accompanied by a slight increase in social benefits; as a consequence, net cash transfers to households (chart 2) played a role by increasing disposable income at a faster rate than primary income.

Also, chart 2 clearly shows that households’ material conditions in France were sustained during the economic crisis through the redistribution process. The net cash transfers to households ratio started increasing during the depths of the economic crisis (the ratio peaked in Q3 2009 at 92.0) and the real household disposable income began to diverge from the pattern exhibited by economic growth, as shown in chart 1.

Confidence, Consumption, and Savings

Household disposable income is a meaningful way to assess material living standards, but to get a fuller picture of household economic well-being it is interesting to look also at households’ consumption behaviour. Chart 3 shows that consumer confidence ticked-up in Q1 2015 (the index increased from 99.3 in Q4 2014 to 99.7 in Q1 2015) suggesting that consumers are now more confident about their economic situation. This confidence helped boost real household consumption expenditure per capita by 0.9% in Q1 2015 (chart 4), with the relevant index increasing from 101.6 in Q4 2014 to 102.5 in Q1 2015, the strongest quarterly growth rate of the time period shown.

The households’ savings rate (chart 5), which shows the proportion that households are saving out of current income, increased 0.4 percentage points in Q1 2015, as compared to the prior quarter. Households chose to use some of their increase in income to increase the amount of their savings. The households’ savings rate in Q1 2015 was 15.0%, 1.3 percentage points lower than the peak reached in Q3 2009 (during the depths of the economic crisis). The crisis led to a substantial increase in the savings rate of households, reflecting households’ greater uncertainty on the development of their future income.

Debt and net worth

The households’ indebtedness ratio, i.e. the total outstanding debt of households as a percentage of their disposable income, is a measure of (changes in) financial vulnerabilities of the household sector and can be helpful in assessing debt sustainability. In Q1 2015, household indebtedness in France (chart 6) was 102.2% of disposable income, an increase of 2.3 percentage points from the prior quarter.

A growing debt ratio is often interpreted as a sign of financial vulnerability. However, when assessing vulnerabilities, one should also look at the availability of assets, preferably taking into account both financial assets (saving deposits, shares, etc.) and non-financial assets (for households, predominantly dwellings). Because information on households’ non-financial assets is generally not available on a quarterly basis, financial net worth (i.e. the excess of financial assets over liabilities) is used as an indicator of the financial vulnerability of households.

In Q1 2015, financial net worth of households (chart 7) in France was 246.8% of disposable income, 10.5 percentage points more than Q4 2014. The increase in the first quarter was predominantly due to holding gains on assets (in particular in equity and investment fund shares), but also financial investments, in particular a sharp rise in savings deposits and increases in life insurance contracts, accounting for a significant share of the increase in net worth.


The unemployment rate and the labour underutilisation rate (chart 8) also provide indications of potential vulnerabilities of the household sector. More generally, unemployment has a major impact on people’s well-being. In Q1 2015, the unemployment rate was 10.3%, down from 10.5% in Q4 2014. The labour underutilisation rate was 17.8% in Q1 2015, well above the standard unemployment rate but down slightly from the fourth quarter.

As shown above, in order to properly measure people’s material well-being, looking beyond economic growth is essential. In the first quarter of 2015, households in France appear to be better off than GDP figures alone would suggest. To fully grasp people’s overall well-being, one should even go beyond household material conditions, and look at a range of other characteristics that shape what people do and how they feel.

Useful links

For many years, OECD has been focusing on people’s well-being and societal progress. To learn more on OECD’s work on measuring well-being, visit the Better Life Initiative.

Interested in how households are doing in other OECD countries? Visit our household’s economic well-being dashboard.

3 Responses
  1. Edward Gate permalink
    September 17, 2015

    I found out that the average household net-adjusted disposable income per capita in France is $28 799 a year, its more than the OECD average of $25 908 a year. But there is a considerable gap between the people in the top and people in bottom – the top 20% of the population earn close to five times as much as the bottom 20%.
    Wondering whats the current situation of Common Reporting Standard in France.

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