June 2021 MAJOR FUTURE ECONOMIC CHALLENGES International Commission chaired by Olivier Blanchard and Jean Tirole APPENDICES MAJOR FUTURE ECONOMIC CHALLENGES APPENDICES Rapporteurs Olivier Blanchard et Jean Tirole Auteurs Christian Gollier, Mar Reguant Dani Rodrik, Stefanie Stantcheva Axel Börsch-Supan, Claudia Diehl, Carol Propper JUNE 2021 TABLE OF CONTENTS In early 2020, the French President Emmanuel Macron asked Olivier Blanchard and Jean Tirole to set up a commission of French and foreign experts to analyse three major challenges – climate, inequalities and ageing. Their report, Major Future Economic Challenges, was published in June 2021 and is available online. The Appendices gathered here complete this report, namely the two sections dedicated to economic inequality and insecurity and to the demographic change. APPENDICES TO CHAPTER TWO – ECONOMIC INEQUALITY AND INSECURITY: POLICIES FOR AN INCLUSIVE ECONOMY.................. 7 Appendix 1 – Good Jobs and Economic Security: Summary of French Attitudes ..... 9 Views on the Current Situation .......................................................................................................................... 10 Views on Equality of Opportunity ...................................................................................................................... 13 Expectations of Economic Situation in the Short, Medium and Long Run ...................................... 15 Views of “Good Jobs” and Attitudes Towards Work ................................................................................. 17 Trust in Government and Institutions .............................................................................................................. 22 Views on Fairness and Redistribution............................................................................................................. 23 Understanding of Policies .................................................................................................................................... 27 Views on Current Policies .................................................................................................................................... 28 Views on Ideal Policies ......................................................................................................................................... 30 Views on the Role of Government in Ensuring Economic Security .................................................... 31 Views on Social Dialogue ..................................................................................................................................... 32 Appendix 2 – Inheritance Taxes ......................................................................................................................35 Global Wealth Has Increased but Has Become More Unequally Distributed .......................... 35 Inheritance Taxes Exist in Many Developed Countries, Although Their Use as a Redistributive Tool Has Declined ..................................................................................... 38 In the French Context, Inheritance Taxes Are Both Unpopular and Misunderstood ............... 42 Challenges Related to a Modern Inheritance Tax .................................................................... 45 An Example of a Beneficiary-Based Lifetime Tax: the Irish Case ........................................... 48 INTERNATIONAL COMMISSION Olivier Blanchard-Jean Tirole 3 JUNE 2021 Major Future Economic Challenges Appendix 3 – Capital Taxes ............................................................................................................................... 51 Taxation of Capital vs. Labor in an International Context.................................................................. 51 Automatic Exchanges of Information Has Contributed to Securing a New Base for Taxing Capital ................................................................................................................................................... 68 Tax Expenditures (niches fiscales) ............................................................................................................... 73 Appendix 4 – Corporate Taxes (BEPS) ..................................................................................................... 85 BEPS 1.0 .................................................................................................................................................................... 85 The New Initiatives to Fight Tax Avoidance by MNEs: GILTI (US) and BEPS 2.0 (OECD) ... 92 Appendix 5 – Formal Education ................................................................................................................... 105 Students from France Have an Academic Performance Slightly Above International Average .................................................................................................................................................................... 105 However, the French System Remains Very Unequal .................................................................... 106 Pre-elementary education is a determinant of both overall academic performance and inequalities .................................................................................................................................................... 108 Teacher Status and Working Conditions in France ........................................................................... 110 Vocational Tracks (High School and Higher Education) ................................................................. 112 Transition to Higher Education ..................................................................................................................... 112 The Importance of Engaging with Employers ....................................................................................... 113 Review of Relevant International Policies about Education .......................................................... 114 Appendix 6 – Labor Market Regulation .................................................................................................. 117 Minimum Wage .................................................................................................................................................... 117 Collective Bargaining ........................................................................................................................................ 121 Employment Protection .................................................................................................................................... 123 Temporary Work .................................................................................................................................................. 125 Appendix 7 – Social Protection System ................................................................................................. 129 Unemployment ..................................................................................................................................................... 130 In-Work Benefit .................................................................................................................................................... 134 Minimum Income Scheme .............................................................................................................................. 135 Housing Benefits ................................................................................................................................................. 136 Appendix 8 – Deploying the European Green Deal Towards a Good Jobs Agenda ................................................................................................................................................................... 141 Background – European Green Deal and the Just Transition Mechanism ........................... 141 Following an Old Welfare State Model vs. a Good Jobs Agenda .............................................. 142 Good Jobs Potential of Green Technologies ........................................................................................ 142 Energy Production .............................................................................................................................................. 144 Circular Economy................................................................................................................................................ 146 Agriculture............................................................................................................................................................... 146 Transportation ...................................................................................................................................................... 147 Energy Efficiency ................................................................................................................................................ 147 Economy-Wide Effects ..................................................................................................................................... 148 Skill Requirements ............................................................................................................................................. 149 More Jobs vs. Good Jobs ............................................................................................................................... 149 Deploying the European Green Deal and Just Transition