DP2108 Regional Aspects of Unemployment in Europe and in Italy

Author(s): Fiorella Kostoris Padoa Schioppa
Publication Date: March 1999
Keyword(s): Europe, Regions, Unemployment
JEL(s): H50, J21, J6, O57
Programme Areas: Labour Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2108

Unemployment in Europe is a worrying phenomenon not so much because it hits 18 million people, but because it almost exclusively affects particular population segments. Italy represents a textbook case of a European country where labour market imbalances only weigh upon certain social components: namely long-term unemployed, women, young people, depressed areas and particularly the Mezzogiorno, a poor region within a rich country. In all European countries suffering from excess labour supply - with the only exception of France and Spain - some regions enjoy full employment, while others have a very high unemployment rate. Thus, understanding the Italian unemployment and finding effective solutions for it, is useful to understand and treat the main European labour market pathologies. An appropriate mix of demand and supply management policies, combined with strategies aimed at decreasing mismatch, appears advisable for Italy as a whole and for the reduction of its regional labour market differences. General employment policies are useful to solve regional problems too; the latter do not usually require ad hoc therapies. However, some regional industrial policies may have a positive impact on employment, provided their core consists of offering services to firms.