This essay has examined the Italian SWTR, which is a typical example of the European Mediterranean one where the role of the State is marginal as compared to that of the family. The latter has to bear the cost of the extremely slow transition period young people undergo on their way from education to a stable employment. The slowness is the consequence of a sclerotic labor market and a very inefficient and disorganized educational system. On the one hand, a very low job finding rate is causing very long unemployment spells, also to young people. This is systematically preventing young people from accumulating the work experience that is necessary to them to build their competences, especially the job related ones. On the other hand, the educational system, which is sequential, has as a mission only to generate general education, with little space given to vocational education for the young people aiming to finding a job, rather than continuing to the university. A law of 1969 allowed any graduate from high secondary school to access the university, therefore, degenerating vocational and technical education, which did not prepare to work anymore. This contributes to maintain the rate of school dropout from compulsory education at around 18%, one of the highest shares in advanced economies. At the university level, delayed graduation and dropout are the rule and many young people remain trapped for many years, sometimes for a decade or more, to obtain a university degree. About 55% of those who enrol at the university dropout and over 40% of the rest graduate with substantial delay. The overall consequence of a sclerotic labor market and disorganized educational system is that on average young Italians find a permanent job in their thirties.
In the past two decades, there have been many reforms designed, on the one hand, to make the labor market more flexible by reducing hiring and firing costs, and, on the other hand, to a lesser extent, to make both secondary and tertiary education more inclusive and interlinked to the labour market. A number of different indicators point to a remarkable increase in wage, functional and numerical flexibility, also without considering the recent Jobs Act. The changes in the employment protection legislation have helped slightly reducing the youth unemployment rate, but have not succeeded in smoothing the overall school-to-work transition system that remains one of the slowest and most sluggish in the world. This also explains why in Italy, as in other Latin Rim countries, the disadvantage of the young compared to adults is constantly high.
The attention of the government has recently shifted towards reforming the education system and the employment services. The introduction of work related learning within the Good School reform is changing the traditional sequential nature of the educational system and hopefully paving the way towards introducing the dual principle in the Italian SWTR. Objectives for the near future could be work-related learning at the university level and apprenticeship as an alternative to technical and vocational schools for the students more interested in finding a job. This would probably help also reducing the still high dropout rate from compulsory education within the target of 10% suggested in Europe 2020.
Furthermore, to shorten the school-to-work transition period, the markets of many goods and services should be liberalized. Many employment opportunities could come for young people from liberalising public transportation and housing services, where the internet is opening new business opportunities especially for young people.
In addition, efficient careers guidance systems should be developed. There are various ways of building closer links between the education system and the world of work. We have already mentioned Germany’s dual model, but alternatives are provided by the Japanese schools and universities, which place qualified students directly in firms and by the Anglo-Saxon job placement services, where both young people and individual firms bear the responsibility and honour of choosing the best match. It is absolutely vital that Italy moves decisively towards a mix of these three systems as it is, in fact, doing, but at a too slow pace.
Last, but not least, employment services and pro-active placement and training schemes should be soon implemented to realize a fully-fledged flexicurity system. This tile of the Jobs Act still remains to be placed to complete the puzzle.
Chosen excerpts by Job Market Monitor. Read the whole story at Why so slow?: the school-to-work transition in Italy