Day: 22 October 2024

INSEE’s latest report has revealed a rise in French household incomes, with significant growth in asset-based wealth. However, France still trails behind the U.S. in disposable income, despite strong European comparisons.

On 17th October, the National Institute of Statistics and Economic Studies (INSEE) published the 2024 edition of its Household Income and Wealth report (Les revenus et le patrimoine des ménages), revealing new insights into what French households earn, own, and how their incomes compare internationally. The report covers everything from social contributions to high incomes, shedding light on the financial landscape of the country.

In 2023, the average income per capita in France experienced a significant rise, partly driven by wage increases, but inflation dampened the real purchasing power of households. Despite these gains, France still lags behind the United States in terms of disposable income, although it compares favourably with its European neighbours.

Household earnings and wealth in France

According to the report, the gross disposable income (RDB) of French households rose by 8% in 2023, reaching €1,774 billion. This marked a significant jump from the 5.2% growth in 2022. Salaries, which represent a significant portion of household income, increased by 5.3%, reaching a total of €1,480 billion. The rise in the minimum wage (Smic) of 5.4% played a pivotal role in this, alongside a 2.4% increase in public sector wages.

Income from entrepreneurial activities also saw growth, rising by 4.2% in 2023. Meanwhile, income from property and financial investments surged by a remarkable 17.4%, jumping to €398.5 billion. This was fuelled by the rising interest rates, which benefitted households with significant bank deposits and financial assets . However, while these figures represent substantial growth, the high inflation rate of 7.1% limited the overall impact on real purchasing power, which only grew by 0.8%.

International comparison of incomes

In 2022, France’s disposable income per capita stood at €37,300 when adjusted for purchasing power parity (PPP), placing it second among major Western European countries. Germany topped the list with a per capita income of €42,100, while Italy and Spain lagged behind at €34,600 and €28,700, respectively .

The contrast becomes starker when comparing France with the United States. American households enjoyed a disposable income per capita of €58,200, a substantial 56% higher than in France. When adjusted for public services like education and healthcare, which are more heavily subsidised in Europe, this gap narrows slightly, with the adjusted income in the U.S. still 36% higher than that of France.

The disparity in income between the U.S. and European countries is also evident over time. Between 2007 and 2022, the purchasing power of French households grew by 11%, while U.S. households saw a much larger increase of 21%. However, France’s social welfare measures, such as energy price caps and fuel subsidies, helped limit the impact of inflation in 2022, supporting household purchasing power during tough economic times.

The role of social contributions

Social contributions remain a significant part of the French system, redistributing wealth and supporting lower-income households. Remarkably, in 2021, 44% of households in mainland France received some form of non-contributive social benefit. These include family benefits, housing aid, and minimum income support. For the lowest-income households, social transfers account for nearly half of their total income.

France’s top earners

INSEE’s report also shed light on the very top earners in France. In 2021, individuals in the top 1% had an annual income of over €121,370 before redistribution, significantly more than the median income of €24,800. This group is heavily concentrated in Paris and the Hauts-de-Seine region, with 86% owning their homes. While high-income households benefit substantially from investment income, their overall tax burden is also greater, significantly contributing to France’s progressive income redistribution model.

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Photo credit: Lisa Van Vliet, Unsplash

Earlier this month, four new ambassadors from Cyprus, Sri Lanka, Cambodia and Ethiopia were formally welcomed to the Principality by Prince Albert II and Marie-Catherine Caruso-Ravera, Monaco’s Director of Diplomatic and Consular Relations.

On Thursday 17th October, the four senior diplomats submitted their letters of credence to the Prince before being welcomed to the Principality with a ceremony attended by Monaco’s Director of Diplomatic and Consular Relations, Marie-Catherine Caruso-Ravera.

Among the newly appointed emissaries is Pavlos Kombos, who hails from Cyprus. With a degree in international law from the University of Edinburgh, specialising in EU law, Kombos has held numerous high-level positions representing his country throughout his career. He previously served as the Deputy Permanent Representative of Cyprus to the Council of Europe and worked within the EU External Action Service. Most recently, he was Deputy Permanent Representative of Cyprus to the EU. He currently holds multiple roles, including Ambassador to France, Permanent Delegate to UNESCO and Ambassador to the Organisation Internationale de la Francophonie (OIF).

Also joining the diplomatic ranks in Monaco is Manisha Gunasekera of Sri Lanka. With 28 years of diplomatic experience, she has previously held positions as Sri Lanka’s High Commissioner to the UK and Ambassador to South Korea. Gunasekera holds several degrees, including a doctorate from Sciences Po, Paris. She now serves as Sri Lanka’s Ambassador to France and is simultaneously accredited to Spain, Portugal and Andorra, alongside her role as Permanent Delegate to UNESCO.

Cambodia’s David Luy is a graduate of the Moscow State Institute of International Relations and began his diplomatic career in 1999. He has since held various high-ranking positions, including Consul General in Hong Kong and Macau, and Secretary of State in charge of International Cooperation. He is currently Cambodia’s Ambassador to France and is also accredited to Italy, Spain, Portugal, Malta and Andorra.

Finally, Mahlet Hailu Guadey of Ethiopia has an extensive background in political science and international relations. She is a graduate of Addis Ababa University and holds a Master’s degree from the Conservatoire National des Arts et Métiers in Paris. Ambassador Guadey has significant experience in various roles within Ethiopia’s Ministry of Foreign Affairs. She has also served as Deputy Permanent Representative of Ethiopia to the UN in both New York and Geneva. She now represents Ethiopia as Ambassador to France, with additional accreditation to Portugal, Spain and the Holy See, as well as serving as Permanent Delegate to UNESCO.

Read related:

Monaco welcomes new ambassadors from the Holy See, Uruguay, Colombia and Angola

Monaco Life is produced by real multi-media journalists writing original content. See more in our free newsletter, follow our Podcasts on Spotify, and check us out on Threads,  Facebook,  Instagram,  LinkedIn and Tik Tok. 

Photo credit: Stéphane Danna / Monaco Communications Department