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EACEA National Policies Platform: Youthwiki
Italy

Italy

3. Employment & Entrepreneurship

3.1 General context

On this page
  1. Labour market situation in the country
  2. Main concepts

Labour market situation in Italy

Italy remains the country with the lowest employment rate in the EU-15 after Greece: at the end of 2020, it was 61,9% (63,5 in 2019) against 71,7% of the EU-27, 58,3% of Greece, but 78,3% of Germany and 77,8% of Denmark, as well as 72,1% of France and 65,7% of Spain, [source:Eurostat– Employment rate by sex, age group 20-64].

The data were widely affected by the COVID19 pandemic, even though a true assessment would be possible probably next year, the most immediate and tragic consequences were still visible. For this reason this year’s Labour Market Report.An integrated reading, published by the Ministry of Labour and Social Policies with ISTAT, INPS, INAIL & ANPAL is mostly focused on the pandemic scenario.

It’s emblematic in this regard that the title of the first chapter is “2020 Labour market: An unprecedented crisis”, showing the dramatic effects of COVID19 on economy and jobs . Despite the support measures introduced by the governments, which had affected especially in the period between July and November, the job losses were more than 300.000, with a significant percentage in people employed with a fixed-term contract. Some categories were more affected than others and particularly those who represent a huge percentage of the Italian workforce,like small and family owned companies, food and touristic enterprises, an heterogeneous group of independent workers; thus manifesting the structural weaknesses of the national system which made the recovery even harder. The heaviest effects were caused by a drastic reduction in consumption and in the almost total blockage of anything connected with mobility and with import and export activities during lockdowns, which impacted also the GDP, like in all the other countries of the world. Thanks to the positive re-opening effect of the summer, that in Italy was exceptional (+15,9%), the decrease was partially softened but it still stays at a -5%, much higher than those of France (-3,9%) or Germany (-4%), for instance. The same tendency could be recorded also regarding employment rates, which are currently -2,3%, so slightly better than the -3,1% recorded in the first three months of 2020. Between June and November in fact, almost 241.000 jobs were recovered, with a higher percentage of those employed full-time, mainly thanks to a series of support measures aiming at improving the general Italian situation, heavily affected by precariousness even before the pandemic.

Another important change has consequently happened in the job market, showing how the already marginalised groups (young people, women and foreign citizens) were once again the most penalised, thus worsening the existing gaps. The young people under 35 for instance show a 21% gap compared to the over 50s (it was of 19,3% in 2019). A worrying data is also the incredible increase in those not actively seeking jobs and those unavailable for working, which became +402 thousands, 3,9% more than at the beginning of 2020. Regarding the job market, the most significant swift is the one represented by the change in the ways of performing work, with smart working going from 5% in 2019 to 19,4% in 2020, with figures likely to grow overtime, considering that the comparison between the number of professions that could be (theoretically) performed remotely and the people effectively working from home show a potential yet to be attained.

Other important statistics can be found in theISTAT, Annual Report 2021. The situation of the country, which shows how higher levels of education acted as protection during the crisis, especially for women between 25 and 64 y.o who have a degree, whose employment rate increased by 4% compared to the ones who have a high school diploma (+0,9%). In this regard it is also always worth mentioning the gap between Northern and southern regions, which even in the case of men with a degree shows to be of almost -10% in employment rates.

Labour market trends and employment dynamics are constantly monitored by the Ministry of Labour and Social Policies - MLPS [cf. § 3.2] as well as by theNational Institute of Statistics - ISTAT, whosedatabase can be consulted for free and is documented through annual reports.

Main concepts

The post-crisis decade of 2008 was characterised by two far-reaching legislative interventions aimed at improving the functioning of the Italian labour market: the “Fornero reform” and the “Jobs Act”.

The Fornero reform (Law 92/2012) intervened on the pillars of labour regulation and labour policies according to the logic of flexicurity, promoting the liberalisation of labour relations and the strengthening of income support measures, as well as the development of active labour policies.

The Jobs Act (Delegated Law 183/2014 and subsequent implementing legislative decrees) affected the labour market regulation and labour market policies too:

  1. Regarding employment regulations, the Jobs Act further consolidated the trend of liberalisation in employment institutions prompted by the Fornero reform, with the aim of relaunching permanent employment, especially among young people. The Jobs Act established the “contract with increasing protections” (and encouraged it through tax relief for companies adopting it). The contract provides for the possibility for companies to easily dismiss newly hired employees, who in this case are entitled to a cash compensation proportional to the service period. The Jobs Act further liberalised fixed-term contracts, even if it set a limit to their use; abolished job sharing and contingent work; reviewed the legislation on part-time work, providing for the use of this type of contract also as an alternative to parental leave.
  2. Regarding social safety nets, the Jobs Act has contributed to increasing the number of workers covered by the benefits, first of all, reviewing the unemployment benefits scheme (New social insurance for employment - NASPI), introducing the Social Unemployment Insurance (ASDI) for the long-term unemployed, and a monthly unemployment allowance (DIS-COLL) for contingent workers, doctoral students and postdoctoral fellows. Lastly, it reviewed the Wage Guarantee Fund in a restrictive key.
  3. Regarding active labour policies, the Jobs Act, with the Legislative Decree 150/2015, established the National Agency for Active Labour Policies (ANPAL) [cf. §. 3.2.], aimed at coordinating the network of services for the unemployed and a single inspectorate for controls on the safety and regularity of work. Furthermore, it promoted the use of apprenticeships for the recruitment of young people up to 29 years of age.

Labour market reforms represented a fundamental piece of the Italian strategy to relaunch employment, including (but not only) youth employment, as well as contributed to defining the regulatory and institutional framework with employment policies aimed specifically at young people, which included:

  • the development of school-work experience and the development of the “dual learning model” [cf. § 3.5];
  • the implementation of a policy of economic incentives addressed to companies hiring young workers, and a significant investment in the Youth Guarantee program [see § 3.6] to counter the NEET phenomenon;
  • the promotion of forms of self-employment [cf. § 3.9]
  • the institution of GOL (Garanzia dell’Occupabilità dei lavoratori - Workers Occupability Guarantee) of the PNRR (National Plan for Recovery and Resilience) to be built together with Regions as part of the MISSION5 of the plan: cohesion and inclusion.