The distribution of value-added in France 1949-2007                         A backcasting example in base 2000 Pierre-Alai...
National accounts data now available at INSEE › May 2005 : National accounts in base 2000. Publication of   input-output t...
From base 70 to base 2000 : Conceptual innovations and available data   ›   1. base 70 : 1949-1985                        ...
The backcasting of national accounts in base 2000 › Annual backcasting based on data converted to classifications and   co...
Distribution of value-added for non-financialcorporations : France / USA                  80%                  75%        ...
Distinction between non-financial corporations  (NFCs) and sole proprietorships (SPs)  Distinction to make                ...
Allocation of FISIM and distribution of value-added › After 1977 : Amounts of credits and deposits available for each sect...
Impact of the valuation of value-added on its distribution       75%                            1969 : for many corporatio...
Producer prices and basic prices : reconstitution oflong time series of taxes and subsidies                               ...
Uncertainty on the evolution of taxes and subsidies            -> Error margin on the distribution of VA     Distribution ...
Conclusion › We hope that this backcasting exercise will be used as   a starting point for future backcastings in France. ...
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41518607

  1. 1. The distribution of value-added in France 1949-2007 A backcasting example in base 2000 Pierre-Alain Pionnier INSEE October 16th, 2008
  2. 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 ? Page 2 Pierre-Alain Pionnier The distribution of VA in France 1949-2007 October 16th, 2008
  3. 3. From base 70 to base 2000 : Conceptual innovations and available data › 1. base 70 : 1949-1985 › 3. base 95 : 1978-2004 - 1971 : base year - 1995 : base year - 1959-1970 : 1st backcasting - Integration of a new activity and product - 1949-1958 : 2nd backcasting, less classification detailed - Integration of overseas departments to the national economic territory › 2. base 80 : 1959-1997 - Transition to the concepts and - 1977-1982 : base years classifications of SNA 93 - 1970-1976 : 1st backcasting - 1959-1969 : 2nd backcasting, less › 4. base 2000 : detailed - 2000 : base year - Allocation of FISIM, new treatment of-> Same classifications, homogeneous social services, important revisions ofconcepts (SNA 68, ESA 70) trade margins… -> Same classifications, homogeneous Page 3 concepts (SNA 93, ESA 95) Pierre-Alain Pionnier The distribution of VA in France 1949-2007 October 16th, 2008
  4. 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). Page 4 Pierre-Alain Pionnier The distribution of VA in France 1949-2007 October 16th, 2008
  5. 5. Distribution of value-added for non-financialcorporations : France / USA 80% 75% 70% 65% 60% 55% 1961 1969 1949 1957 1977 1985 1993 1997 2001 1953 1965 1973 1981 1989 2005 France (non-financial corporations) United States (non-financial domestic corporate business sector) 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. Page 5 -> To which extent do they depend on backcasting assumptions ? Pierre-Alain Pionnier The distribution of VA in France 1949-2007 October 16th, 2008
  6. 6. Distinction between non-financial corporations (NFCs) and sole proprietorships (SPs) Distinction to make Distinction to make No distinction to make above GOS above VA 1956 1970 2007 Share of SPs in the VA of SPs+NFCs Two alternative methods to neutralize theand share of NS workers in total employment growing proportion of wage-earners50% 80%45% 75%40% 70%35% 65%30% 60%25% 55%20% 50% 45%15% 40%10% 1997 1965 1961 1963 1967 1969 1971 1973 1975 1977 1979 1981 1991 1995 1959 1983 1985 1987 1989 1993 1967 1949 1951 1953 1955 1957 1959 1961 1963 1965 1969 1971 1973 1975 1979 1981 1977 1983 Share of SPs in the VA of NFCs + SPs (observed) Labour share in the value-added of NFCs + SPs (at basic prices, except FISIM) without wage imputation to Share of SPs in the VA of NFCs + SPs (obtained by regression) non salaried workers Share of non salaried workers in total employment Labour share in the value-added of NFCs + SPs (at basic prices, except FISIM) with wage imputation to non salaried workers Labour share in the value-added of NFCs (at basic prices, except FISIM) Page 6 Pierre-Alain Pionnier The distribution of VA in France 1949-2007 October 16th, 2008
  7. 7. Allocation of FISIM and distribution of value-added › After 1977 : Amounts of credits and deposits available for each sector -> 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. 76% 74% 72% 70% 68% Impact of the allocation of FISIM 66% 64% on the distribution of VA (S11) 62% 60% 58% 56% 1961 1969 1949 1973 1985 1997 1953 1957 1965 1977 1981 1989 1993 2001 2005 Page 7 Labour share in value-added except FISIM Labour share in value-added including FISIM Pierre-Alain Pionnier The distribution of VA in France 1949-2007 October 16th, 2008
  8. 8. Impact of the valuation of value-added on its distribution 75% 1969 : for many corporations, VAT substitutes to a tax on wages 73% (classified in taxes on production, D29) 71% 69% 67% 65% 63% 61% 59% 1968 : VAT substitutes to other taxes 57% on products (classified in D214) 55% 1965 1997 1959 1961 1967 1969 1971 1973 1975 1977 1981 1983 1985 1987 1989 1991 1993 1995 1963 1979 Labour share in VA at producer prices (except FISIM) Labour share in VA at basic prices (except FISIM) Labour share in VA at factor cost (except FISIM) Page 8 Pierre-Alain Pionnier The distribution of VA in France 1949-2007 October 16th, 2008
  9. 9. Producer prices and basic prices : reconstitution oflong time series of taxes and subsidies P1PP ( producer prices ) = P1 ( basic prices ) + D214 - D31 14 3 24 >0 ⇒ VAPP = VA + D214 - D31 14 3 24 >0 Share of D214 in the VA of S11 Share of D31 in the VA of S1116% 4,0%14% 3,5%12% 3,0%10% 2,5%8% 2,0%6% 1,5%4% 1,0%2% 0,5%0% 0,0% 1965 1979 1989 1949 1951 1953 1955 1957 1961 1969 1973 1975 1977 1981 1983 1985 1987 1991 1963 1979 1959 1963 1967 1971 1955 1957 1959 1961 1965 1967 1985 1987 1989 1991 1949 1951 1953 1969 1971 1973 1975 1977 1981 1983 Base 70 Base 80 Base 70 Base 80 Page 9 Pierre-Alain Pionnier The distribution of VA in France 1949-2007 October 16th, 2008
  10. 10. Uncertainty on the evolution of taxes and subsidies -> Error margin on the distribution of VA Distribution of VA at basic prices : Distribution of VA at factor cost :discrepancies between b. 70 and 80 (1959-1969) error margin in base 200074% 78%72% 76%70%68% 74%66% 72%64%62% 70%60% 1961 1969 1949 1953 1957 1977 1985 1993 2001 1965 1973 1981 1989 1997 2005 68% Labour share in VA (at basic prices, except FISIM) in base 2000 (obtained by following the evolution of the ratio (D214-D31) / VA from 1959 until 1969 in base 80) 66% Labour share in VA (at basic prices, except FISIM) in base 2000 (obtained by following the evolution of the ratio (D214-D31) / VA from 1959 until 1969 in base 70) Base 80 64% 1957 1973 1949 1969 1977 1953 1961 1965 1981 1985 1989 1993 1997 2001 2005 Base 70 Page 10 Pierre-Alain Pionnier The distribution of VA in France 1949-2007 October 16th, 2008
  11. 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. Page 11 Pierre-Alain Pionnier The distribution of VA in France 1949-2007 October 16th, 2008
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