Connecting People With Jobs Strengthening Active Labour Market Policies In Italy

This Report On Italy Is The Fifth Country Study Published In A Series Of Reports Looking Into How Policies Connect People With Jobs. It Discusses How Active Labour Market Policies In Italy Are Performing Both On The National And The Regional Level, Focussing Particularly On The Reform Process In The System Of Public Employment Services Initiated By The Jobs Act. Foreword 5 Acronyms and abbreviations 11 Executive Summary 13 Assessment and Recommendations 15 The Italian labour market is witnessing a mild recovery 15 Some groups are still disadvantaged 15 Under-skilling and labour market mismatch hinder economic growth 16 Spending on active labour market policies is low 16 Spending on active labour market programmes is not well directed 16 Labour market policies rely heavily on subsidising employment relationships 17 Training provision does not address the widespread lack of skills among adults 17 Public employment services have low credibility as job brokers 17 An important labour market reform was introduced in recent years 18 Labour market duality remains a significant problem in Italy 18 Unemployment benefit schemes have so far been fragmented and benefit few 19 Somewhat less fragmentation of the system since Jobs Act and creation of ANPAL 19 ANPAL’s role needs to be strengthened further 20 Efforts should be made to strengthen co-operation 21 The mechanisms to improve the quality of active labour market policies provided by the Jobs Act have not yet been put into practice 22 Benefit conditionality is in its infancy 22 Contracting employment services out to private providers could be a good solution for the under-resourced public system 23 The results of piloting the reintegration voucher seem rather poor 24 A common IT infrastructure is the backbone of the new network of employment services, but efforts to build it are still inadequate 24 The staff in the local employment offices are ill-equipped to deliver modern employment services 25 National profiling tools have the potential to target active policies more effectively when they are fully developed and implemented 26 The national profiling tool should be fully developed and integrated into the business model 27 Profiling of skills is needed to assess training needs and help job matching 27 The labour demand side has been neglected 28 Building employers’ trust in the system of employment services 28 An effective system of public employment services can promote labour mobility 29 Note 32 Chapter 1. Recent trends in the Italian Labour Market 33 1.1. Introduction 34 1.2. General trends in the labour market 34 1.2.1. Some signs of recovery in the Italian labour market 34 1.2.2. Female labour market participation is low despite recent improvements 37 1.2.3. No real recovery in youth labour market situation yet 39 1.2.4. Long-term unemployment is decreasing, but remains high 42 1.3. Skill and qualification mismatches in the Italian labour market 43 1.3.1. Upskilling is necessary throughout the country 44 The skills of Italian adults are low by OECD comparison 45 The skill mismatch is high 46 1.3.2. Rigid wages contribute to skill mismatch and low productivity 48 1.4. Regional differences 49 1.4.1. Regional disparities are vast and not profoundly decreasing 49 1.4.2. Labour mobility is limited 51 1.5. Italy’s resources for labour market policies 52 1.5.1. Italy spends relatively little on active labour market policies 52 1.5.2. The system of public employment services has low credibility as a job broker 55 1.5.3. Strengthening the relevance of ALMPs is of primary importance 60 Employment incentives should be more targeted 60 Upskilling through training programmes reaches only limited groups of jobseekers 61 More emphasis on counselling jobseekers is necessary 63 1.6. Conclusion 64 Notes 65 References 67 Database references 70 Annex 1.A. Returns to tertiary education in Italy 72 Annex 1.B. Expenditures on active labour market policies and the level of unemployment 75 Annex 1.C. Active labour market services and measures according to the Jobs Act 77 Annex 1.D. Expenditures on active labour market policies in Italy in 2015 78 Chapter 2. Reforming the institutional landscape 81 2.1. Introduction 82 2.2. Reforming the labour market 82 2.2.1. Objectives of the Jobs Act 82 2.2.2. Decreasing labour market duality and fostering employment 86 2.2.3. Introducing more equal and universal unemployment benefits 90 Wage supplementation schemes dominate passive labour market policies 90 Changes in the system of passive labour market policies 92 2.3. Strengthening the system of employment services 95 2.3.1. Restructuring the system and enhancing service quality 95 Restructuring the system: some fragmentation will likely remain 96 Setting minimum standards 100 Enhancing quasi-market 101 Linking passive with active measures: enforcing conditionality 101 2.3.2. The crucial role of the National Agency for Active Labour Market Policies 104 ANPAL’s strategic view 105 Co-ordination of the system of employment services remains a challenge 108 2.3.3. Building the IT infrastructure 113 2.3.4. Supporting the local employment offices 116 The number of staff is modest 116 The set-up of processes does not support efficient use of human resources, yet 122 The qualification of staff is low undermining the potential for service quality 125 CPI staff should be given the motivation and tools to contribute to the reform 127 2.4. Conclusions 133 Notes 134 References 137 Database references 142 Chapter 3. Approaches to deliver active policies in Italy 143 3.1. Introduction 144 3.2. Targeting active labour market policies to jobseekers using profiling tools 144 3.2.1. Regional profiling tools are not systematically used 144 3.2.2. The success of the national quantitative tools depends on the IT infrastructure 146 3.2.3. The new qualitative profiling tool complements the quantitative tools 151 3.2.4. A recent attempt to map jobseekers’ skills using the PIAAC online tool 152 3.3. Developing a quasi-market for service providers 155 3.3.1. The approaches towards co-operating with private service providers are mixed 155 3.3.2. Accreditation process of private service providers is fragmented 159 3.3.3. The reintegration voucher to outsource services needs some redesign 162 3.4. Employer outreach and demand-side services 165 3.4.1. The Jobs Act fails to address the services for employers 165 3.4.2. Regional outreach to employers is modest 166 Basic services to employers are offered in most Regions 167 Service package for employers is limited and of low quality 168 The organisational structures for counsellors serving employers are in place, but the supporting structures are missing 169 More interactive channels should be used to increase contacts with employers 171 3.4.3. A new national strategy for employers 172 The new national strategy for employers is well developed 172 The role of ANPAL could be strengthened 173 Public employment services as information providers 175 Public employment services as job brokers (matching and pre-selection) 176 Public employment services as supporters of up-skilling 179 3.5. Conclusions 180 Notes 181 References 184 Blank Page 2 This report on Italy is the sixth country study published in a series of reports looking into how policies connect people with jobs. It discusses how active labour market policies in Italy are performing both on the national and the regional level, focussing particularly on the reform process in the system of public employment services initiated by the Jobs Act. The ongoing reform has good potential to improve the performance of employment services in Italy, particularly if the stakeholders of the system cooperate to establish a binding performance management framework and develop national IT infrastructure supporting the tasks of the local offices to serve jobseekers and employers. The National Agency for Active Labour Market Policies has a key role in encouraging the cooperation between the stakeholders, leading the development of new tools and methodologies and thus supporting the local employment offices to implement the new service model. Besides the general reform process, the review looks at some specific approaches regarding providing employment services in Italy - using jobseeker profiling tools to target active labour market policies; increasing quality and capacity of employment services by contracting out employment services to private service providers; and reaching out to employers and advancing demand-side services