The Italian labour market and the crisis

The Italian labour market is characterized by deep gender differences and regional variability. The data showthat the crisis lead to an increase in the gap of female employment rates and women's inactivity rates withrespect to Europe. The North of Italy experienced a higher increase in unemployment than the South, wheremany people withdrew from the labour market because of poor employment prospects. Moreover, in Italy,the increase in unemployment has been mitigated by the increase in the number of workers having access tothe wage supplementation fund who are not computed within the unemployed. Using a micro simulationtechnique, we estimate the effect of the crisis on income distribution and poverty and find that at the nationallevel, the population showed a reduction in equivalized household income by about 1 percent. The use ofwage supplementation fund, together with a higher involvement of youth living in their birth family, broughtabout the observed limited increase in the poverty rates. The heterogeneity in the system of unemploymentbenefits increased inequalities amongst the unemployed. This calls for a reform of the system of unemploymentbenefit and safety net in Italy that has been long postponed.