When President Mitterrand decided, in 1982–83, to change his economic policy to give priority to the struggle against inflation and for a hard currency, Jospin justified his choice.

After Laurent Fabius was chosen as prime minister in 1984, a rivalry between these two political heirs of Mitterrand broke out when they competed for the leadership of the 1986 legislative campaign.

He lost his seat in the National Assembly in the Socialists' landslide defeat in the 1993 legislative election and announced his political retirement.

Jospin's government also introduced the 35-hour workweek, provided additional health insurance for those on the lowest incomes through the creation of Couverture maladie universelle (which made health care in France a universal right,[11] and was regarded by Jospin and Martine Aubry as one of the "beacons" of their incumbency[12]), promoted the representation of women in politics, expanded the social security system,[13] and created the PACS – a civil partnership or union between two people of any genders.

[12] A parity law was introduced that obliged every party to field an equal number of female and male candidates in national elections.

[16] An "employment premium" was introduced in 2002, similar to tax credits in the UK and US, providing a state subsidy to low-wage earners.

Funds were provided for the renovation of public housing, while company pension savings plans were extended to cover small and medium enterprises.

A state-supervised reserve fund for old-age insurance was established, which created marginal capital coverage and was designed to protect pension levels from financial-market risks.

These included the introduction of mandatory civics instruction in secondary schools,[18] the introduction of financial support for child illness care together with parental time-off obligations, the introduction of special education support (parents d'enfants handicaps), a law against paedophile pornography, the establishment of a government student lunch programme, the launching of "Initiatives citoyennes" to teach children how to live together, the launching of a campaign against "hazing" of children, the creation of programs for parental involvement in schools together with national campaigns for the elections of parent-representatives, the passage of a law designed to safeguard children's rights and campaign against violence in schools, a law against the prostitution of minors that included penalties for clients, the establishment of the "Childhood and the Media" association against violence in the media[18] and the creation of 40,000 new child-care places.

Laws were also passed in November 2001 and March 2002 that added to the list of grounds of discrimination physical appearance, sexual orientation, age, and genetic characteristics.

[28] A law on 'new economic regulations' was passed which aimed at adding an 'ethical' aspect to financial practices, "clarifying competition rules, improving social dialogue and enforcing the rights of consumers."

In terms of industrial relations, the new law strengthened (to some extent) the powers of works councils in takeovers, mergers and proposed share exchanges.

[28] The Jospin Government also established (within the framework of a policy to improve coverage for industrial diseases) of a compensation fund for asbestos victims,[20] and extended the right to asylum.

[28] A social security funding law for 2002 was passed which, amongst other measures, provided a general rise in pensions and increased paternity leave (from 3 to 11 days).

Capital incomes were taxed more heavily, while various measures were introduced which benefited lower social strata and improved their purchasing power.

Lower-income sections of the population received targeted support, and almost all tax measures introduced by the Jospin Government sought to stimulate demand and reduce inequality.

[12] In international affairs, Jospin mostly steered clear of foreign policy, but in 2000 he denounced Hezbollah's "terrorist attacks against Israeli soldiers and civilian populations", a position markedly more pro-Israel than Chirac's.

On 26 February, when Jospin visited Birzeit University, Palestinian students threw stones at him, causing a minor injury.

The far left also strongly criticized Jospin for his moderate economic policies, which they contended were not markedly different from that of right-wing governments favoring businesses and free markets.

Jospin's 2002 presidential manifesto was nevertheless a strongly progressive one, calling for access to housing to be made a universal right, supporting employee representation on the supervisory boards of companies, and advocating better provisions for older people and the disabled.

[33] As noted by one observer, Jospin's manifesto sought to balance its emphasis on 'inequalities in income' with 'equality of opportunity,' eliminating poverty with special regard to housing whilst promoting social investment through (particularly) education.

[34] Many left-wing candidates contested the election, gaining small percentages of the vote in the first ballot that reduced Jospin's support.

As a result, Jospin finished in third place, behind Chirac and narrowly behind the Front National leader Jean-Marie Le Pen.

In 2006, Jospin made it known that he was available to be the Socialist candidate for the 2007 presidential election, but when Ségolène Royal became ascendant in the polls, he declined to enter the 2006 primary in order not to "divide the party".

[36] On 14 July 2012, President François Hollande announced that Jospin would lead a commission on deontology and ethics in French political life.

He declined to locate with precision his rupture with the Lambertists, but Le Monde alleged it was in 1986–87, a year before he became minister, while Lambert himself implicitly situated it in 1988.

[38] Jospin had concealed his relationship with the OCI while following a strategy of entrism into other parties, and specifically denied it when asked about it (claiming in 1995 that the rumor came from a confusion with his brother Olivier).