The distribution of valueadded in France 19492007

1
The distribution of value-added in France
1949-2007

• A backcasting example in base 2000

2
National accounts data now available at INSEE

• May 2005 National accounts in base 2000.
  Publication of input-output tables and sector
  accounts since 1978 and employment data since
  1990.
• May 2007 Publication of input-output tables and
  sector accounts since 1959 (with revision of the
  period 1978-1999).
• May 2008 Publication of input-output tables,
  sector accounts, production accounts / generation
  of income accounts by homogeneous branches and
  employment data since 1949.
• When will these data (prior to 1970) be available
  on the OECD and Eurostat Websites ?

3
From base 70 to base 2000 Conceptual
innovations and available data

• 3. base 95 1978-2004
• 1995 base year
• Integration of a new activity and product
  classification
• Integration of overseas departments to the
  national economic territory
• Transition to the concepts and classifications of
  SNA 93
• 4. base 2000
• 2000 base year
• Allocation of FISIM, new treatment of social
  services, important revisions of trade margins

• 1. base 70 1949-1985
• 1971 base year
• 1959-1970 1st backcasting
• 1949-1958 2nd backcasting, less detailed
• 2. base 80 1959-1997
• 1977-1982 base years
• 1970-1976 1st backcasting
• 1959-1969 2nd backcasting, less detailed

4
The backcasting of national accounts in base 2000

• Annual backcasting based on data converted to
  classifications and concepts of base 2000 no
  interpolation or direct reference to previous
  base years.
• Successive steps computation of supply and use
  equilibriums for 40 products (16 products from
  1949 to 1958) breakdown of total production and
  intermediate consumption between sectors
  distribution of income.
• Specific issues that may have an impact on the
  distribution of VA
• Distinction between non-financial corporations
  and sole proprietorships
• Allocation of FISIM
• Computation of taxes on products except VAT and
  import taxes (D214), subsidies on products (D31)
  in order to convert producer prices (previously
  used for the valuation of production and VA) into
  basic prices (actually used for the valuation of
  production and VA).

5
Distribution of value-added for non-financial
corporations France / USA
Two important stylized facts - The
distribution of VA is more volatile in the
medium/long term in France than in the USA
- The labour share in France never recovered
the level prevailing before the 1st
oil-shock, contrary to the labour share in the
USA. -gt To which extent do they depend on
backcasting assumptions ?
6
Distinction between non-financial corporations
(NFCs) and sole proprietorships (SPs)
Distinction to make above GOS
Distinction to make above VA
No distinction to make
Share of SPs in the VA of SPsNFCs and share of
NS workers in total employment
Two alternative methods to neutralize the growing
proportion of wage-earners
7
Allocation of FISIM and distribution of
value-added

• After 1977 Amounts of credits and deposits
  available for each sector
• -gt direct computation of FISIM.
• For each sector, for credits and for deposits,
  estimation of regressions between the share of
  the sector in the global amount of FISIM and the
  reference rate on the monetary market (RRMM).
• 1949-1976 These regressions based on RRMM are
  used to allocate the global amount of FISIM
  between sectors.

Impact of the allocation of FISIM on the
distribution of VA (S11)
8
Impact of the valuation of value-added on its
distribution
9
Producer prices and basic prices reconstitution
of long time series of taxes and subsidies
Share of D214 in the VA of S11
Share of D31 in the VA of S11
10
Uncertainty on the evolution of taxes and
subsidies -gt Error margin on the distribution
of VA
Distribution of VA at factor cost error
margin in base 2000
Distribution of VA at basic prices
discrepancies between b. 70 and 80 (1959-1969)
11
Conclusion

• We hope that this backcasting exercise will be
  used as a starting point for future backcastings
  in France.
• Details and technical issues (reclassifications
  of taxes) may have a big impact on the overall
  macroeconomic picture.
• Transparency is essential to the credibility of
  backcasted national accounts and may help to
  improve the work from one benchmark to another.