Executive Summary
This review 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 co-operate 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 co-operation between the stakeholders, leading the development of new tools and methodologies and thus supporting the local employment offices to implement the new service model.
The Italian labour market has witnessed mild improvements over the past few years. Nevertheless, the challenges in the labour market are still greater than in most other OECD countries. The unemployment rate is high, the employment rate and labour productivity are low, youth employment has not recovered from the crisis and the gender employment gap and long-term unemployment are decreasing only slowly. Low qualifications and low skills of the labour force cause under-skilling and depress productivity. Mismatches are common also due to wage rigidity and low labour mobility. Regional disparities are relatively high compared to other OECD countries, but the major labour market challenges are often similar across regions.
Despite the difficult labour market situation, the resources devoted to labour market policies to fight the challenges are too low. The package of active labour market policies is under-financed and weakly targeted, over-reliant on employment incentives. Training measures are essentially missing for jobseekers aged over 29, options for institutional training are scarce, counselling services for jobseekers and job-brokering activities are under-developed. As such, the system of public employment services lacks credibility among the labour market stakeholders and its contribution to improve the labour market is limited. Furthermore, as the system of public employment services is decentralised, different approaches to service provision are practiced across country (e.g. concerning targeting active measures, contracting out services, reaching out to employers), leading to unequal access and quality of services.
The Jobs Act has had some positive effects in enhancing labour market flexibility and harmonising unemployment benefits. Nonetheless, the pillar of the reform aiming at strengthening active labour market policies has been more cumbersome. It has decreased fragmentation as 21 regions and autonomous provinces are now responsible for providing active labour market policies instead of over 100 provinces that were responsible prior to the Jobs Act. However, the co-operation between the regions is not sufficient, limiting further improvements of the system. The recently created National Agency for Active Labour Market Policies has the potential to improve co-operation. This requires clearer establishment of ANPAL as the supporter of regions and local employment offices in designing and implementing improvements in the system of employment services.
The Jobs Act aims also to improve the quality of active policies by laying down general principles of active labour market policies, setting grounds for introducing minimum service standards across the country, enhancing the quasi-market for employment services by stimulating competition between the public and private providers and enforcing activation conditionality on benefit recipients. All these initiatives are yet to be put into practice as the common IT infrastructure to support the implementation is still being developed and the staff in the local employment offices are not equipped to deliver the new concepts.
The OECD analysis suggests that the key activities to improve the performance of the Italian system of employment services are the following:
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Establish an accountability framework in the system of public employment services involving an agreement between regional and central authorities on the set of objectives and corresponding key performance indicators. Part of regional budgets should depend on the achievement of the set target levels.
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The National Agency for Active Labour Market Policies has to strengthen its strategic view on its role as the supporter of regions and local offices in reforming employment services. Moreover, ANPAL should communicate its strategy systematically externally and internally with the help of the in-house entity ANPAL Servizi which has a regional outreach, to mobilise the staff in local offices to implement the reform in active labour market policies.
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Support the staff in the local employment offices in improving their services by continuous training programs reaching all staff members on implementing the new methodologies, IT infrastructure and labour market information and by designing new IT infrastructure supporting the processes in the local offices.
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Strengthen activation conditionality on registered jobseekers by developing IT tools supporting local offices to apply conditionality and to communicate violations to unemployment benefit authorities and by raising awareness among the staff in local employment offices about the objectives of activation.
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Increase the role of private providers to support under-resourced public employment offices by laying down a strategy on how the market should function, harmonising the rules of contracting out, increasing the range of services that can be outsourced and enhancing performance-based outsourcing.
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Increase the effectiveness of active labour market policies by conducting regular impact evaluations that feed into targeting the measures, by using profiling tools to target employment incentives only to the most vulnerable groups, by linking the provision of training programs with employers’ needs and by expanding the range of active measures to address individual needs of jobseekers facing greater obstacles to enter employment.
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Support local employment offices in job brokering by providing national tools for mapping jobseekers’ skills, tools for job mediation and matching that support matching on skills and across different regions and online tools for uploading vacancies with matching functions for employers. Provide training for dedicated employers’ counsellors and devote these counsellors to actively reach out to employers (selling demand-side services and encouraging job mediation by employment offices).