Spatial Effects of Labour Policies Promoted in Italy from 1996 to 2006: An Analysis in the EU Context

Abstract

One of the most important economic and social facts concerning the European Union consists in the mismatch among its regions in terms of unemployment rates. The paper aims at examining and measuring the efficiency of Italian policies for labour market carried out in the last 10 years, in terms of reduction in the regional disparities in comparison with the whole European distribution of unemployment. We question whether these policies have been successful or the territorial dimension has still a relevant role on the unemployment in Italy. We try to answer to this question by calculating the Theil Index using data from 1996 to 2006 on unemployment and participation from Eurostat at NUTS 2 level, comparing Italian data with those of other EU countries. Our results show that Italy has still a prominent role in the geographical disparities among regions and that its contribution to the geographical concentration of unemployment is still high (especially if we consider female and youth unemployment).

Acknowledgement

The authors thank Prof. Nicola Bellini, Scuola Superiore Sant'Anna, for reading the paper and for his suggestions.

Notes

The White Book itself underlines that “the mobility of those looking for a job still appears limited by an excessively rigid wage structure, and by high indirect costs (house, transport)” (White Book, p. 22); this to highlight the importance of the spatial aspect.

Note that:

• (i) data for some countries (Estonia, Cyprus, Latvia, Lithuania, Luxembourg, Malta and Slovenia) cannot be decomposed at the NUTS-2 level, so they were treated as a single administrative region;

• (ii) as for Denmark, which is divided into five regions at the NUTS-2 level, EUROSTAT data were not available at this level of decomposition, so in this case also it was treated as a single region;

• (iii) the problem referred to (ii) applies, for 1996 alone, also for Austria and Ireland;

• (iv) for some particularly small regions or regions in remote areas (e.g. French Guyana, Canary Islands and Guadeloupe), the data were incomplete or shortcoming. In these cases, the estimate was based on interpolation of data on the same statistical unit as recorded in previous years and years thereafter.

It suffices to remember the crisis created by international terrorism and the adoption of the Euro.

The results in our analysis are in line with what reported by the European Commission in its “5th Progress Report on Economic and Social Cohesion” (Commission of the European Communities, 2008). In this report, the Commission refers to a EUROSTAT study aimed at measuring the per cent of population living in the different EU countries, in regions “underperforming” (UPRs) with respect to unemployment (that is, regions with an unemployment rate which is 150% over the rate of their country). Italy is in first place (with 27% of the population living in UPRs), followed by the Czech Republic (22.9%), Belgium (20.8%), Austria (20.2%) and Germany (18.2%).

Note that the differential in the cost of living between South and Centre-North was estimated in 2008 altogether between 17% and 21% (Cannari & Iuzzolino, 2009).

From 2001 to 2006, the gap has widened in terms of GDP growth produced by the South as compared to other weak areas in the EU; while in Italy in this period, there has been a growth in employment without an equally substantial growth in GDP; at a continental level, the years 2000–2006 were characterized by a significant process of convergence (SVIMEZ, 2007), with a growth above the European average both in the new Member States (over 5% on average) and in the other regions of Objective 1 of EU-15 (+3.8%), against a very small 0.4% of the regions of southern Italy (Svimez, 2007).