New calculations by the French National Institute of Statistics and Economic Studies show that redistribution improves the standard of living of broad parts of the population.

The French National Institute of Statistics and Economic Studies (INSEE) has published a new analysis highlighting the impact of public transfers on the reduction of income inequalities. In total, the redistribution through public services and pensions in 2019 amounted to 500 billion dollars, which equals 25 percent of the net national income of the same year. While affluent households before transfers had an income 18 times higher than that of poor households, this number dropped to 3 times higher after transfers – a massive reduction.

Overall, 57 per cent of people received more than they paid in in 2019. Among households where the reference person is aged 65 or over, more than 90 percent of individuals benefitted from improved living standards through the extended redistribution. They are the main beneficiaries of healthcare spending and the French pay-as-you-go pension system. With the exception of pensioners, the net beneficiaries of extended redistribution are mainly low-income earners, families with children and less-educated households.

Net contributors are affluent households aged between 40 and 60, more likely to be managers or urban dwellers.

Read the analysis (in French) here.