Employment grows in the South of Italy

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A survey published in March 1999 revealed fast employment growth in the South of Italy in 1998, with the growth concerning mainly part-time workers, workers on fixed-term contracts and women, reflecting recent labour market policy. However, the early figures for the first months of 1999 indicate a slowdown in growth.

The Association for the Development of Industry in the Mezzogiorno (Associazione per lo sviluppo dell'industria nel mezzogiorno, Svimez) is a public body which studies the problems of the South of Italy (the Mezzogiorno). In March 1999, it published a survey of employment trends in Italy in 1998 (Informazioni Svimez No 1-3/1999).

The survey finds that in 1998, the level of employment in Italy grew by 0.5%, or 110,000 workers. Employment - excluding the agricultural sector where employment fell in both North and South - grew by 0.7% in the Centre and North and by 0.9% in the South. The growth concerned in particular the tertiary or services sector, but also manufacturing industries, while a decrease was recorded in the building sector, which has not been influenced by government tax incentives for restructuring.

The process of structural change in the Italian labour market, which aims at adopting flexible forms of employment contract, has been reflected in the types of jobs which account for recent employment growth. This growth has concerned mainly part-time workers, workers on fixed-term contracts and women.

In 1998, part-time employment increased by 10.7% in the South and by 6.8% in the Centre and North, though despite these increases, the part-time employment rate in Italy stood at 7%-8% - very far from the average rate of 16% in France, Germany and the UK or the 38% found in the Netherlands. While the increase in part-time employment in the Centre and North might represent an adjustment of the supply of labour in a context of full employment, in the South this increase might be the result of the lack of well-paid jobs. From this perspective, it is significant that in 1998 part-time employment in the Centre and North largely concerned women, who represented 76% of all part-time workers, compared with only 51.1% in the South.

There is also a greater recourse to fixed-term contracts in the South than the Centre and North, which probably reflects the uncertainty of southern companies about maintaining employment levels and the necessity to control their use of labour.

The application of the employment promotion measures introduced by Law 196/1997 - the so-called "Treu package", which set out the rules for implementation of the September 1996 tripartite "pact for employment" (IT9702201F) - appears to have influenced positively the overall development of the southern regions. It is exactly those groups of workers which correspond to the types of employment introduced by this legislation - workers employed on fixed-term contracts through work subsidies or in "publicly useful" jobs - which accounted for 1998's overall employment growth in the South.

The increase in the number of employed people did not influence positively the unemployment rate, which in the South increased from 22.2% in 1997 to 22.8% in 1998. However, even this increase can be interpreted as a positive sign of recovery. A large part of the increase in unemployment in the South is accounted for by the entry into the labour market of those people classified as "other people in search of employment", made up mainly of on the "fringes of the supply of labour" - that is, those who start to look for a job when employment expectations increase. What makes unemployment in the South so dramatic is not only its geographical concentration but the high number of young unemployed people. The rate of youth unemployment (15-24 years of age) was 56.6% in the South in 1998 while it decreased from 22% to 20.7% in the Centre and North.

The first surveys of 1999 indicate the employment growth rate of the South appears to have slowed down while that of the Centre and North has increased. The favorable trends in the services sector, which is at the basis of the Centre and North's employment growth, have not influenced positively employment in the South, which is strongly penalised by the major decrease in jobs in the agricultural sector. If these trends turn out to be correct during the course of the year, the risk of widening the gap between the Centre and North and the South will be very high, although the 1998 figures raised hopes of a reversal of the trend of previous years.

Moreover, the demographic data indicate the return of a migratory trend from southern regions to central-northern regions. In the former the population has decreased by 2.37 per 1,000 while in the latter the population has increased by 2.4 per 1,000. According to Svimez, migration from the South to the North reached 88,000 in 1998, twice as high as the previous year.