Introduction

The Italian labour market has undergone dramatic changes over the last 20 years. It has been strongly liberalised since the mid-1990s through a series of reforms, initially aimed at fixed-term employment relationships only but, more recently, also targeting open-ended contracts. The share of employees with fixed-term contracts has tripled since the beginning of the 1990s, and increased fivefold in the younger age groups. In 2012, more than 80% of new labour contracts established in Italy were fixed-term contracts, and 40% of them lasted less than six months (ISFOL, 2013a), with potentially dreadful effects on productivity. At the same time, income support has also been reformed, with the upgrading of existing schemes and, lately, the introduction of new ones. Contrary to what has happened in most European countries, therefore, the level of income protection for those who lose their job has been increased (admittedly from a low starting level). Similarly to trends occurring across all advanced capitalist countries, an emphasis on benefit recipient activation and the establishment of ensuing work conditionality requirements have been introduced. However, the upgrading of income support has not maintained the pace of (both regulatory and structural) changes in the labour market, bringing about a condition of ‘flex-insecurity’ (Berton et al, 2012). As for the activation measures, their implementation has been soft and incomplete, in part, as a consequence of the ineffectiveness of Public Employment Services (PES), both in the control of beneficiaries and in the provision of services to the unemployed. Moreover, investment in active labour-market measures has been mostly directed to hiring subsidies for employers rather than to vocational training and employment services, therefore failing to address structural problems. The area of active labour-market policies (ALMPs) is, indeed, the field of labour policy where the distance between Italy and the other large European countries is the greatest, in a context characterised by huge regional variability in the availability of both institutional capacity and labour-market opportunities.

This chapter is structured as follows: the next section provides the reader with a basic depiction of the Italian labour market, its evolution during the crisis and its main segmentation dimensions.