Evaluating Asimmetries in Active Labour Policies:the Case of Italy

This paper aims at analyzing whether Active Labour Market rograms (ALMP) could have different effects on unemployment nd employment dynamics according to the particular region here the program is implemented. To this end, the research nalyses alternative theoretical and econometric models hought tocapture the possible effects that active labour market policies might have on labour forces dynamics. The econometric methodologies implemented are the Generalized Method of Moment (GMM) and the Panel Vector Autoregression (P-VAR). The evidence emerging from the GMM models suggests that the effects of ALMP on unemployment are not similar across the Italian regions. It follows that some active programs are likely to exert a greater effect in the South than in the North. The results of the P-VAR estimated models are synthesized in the impulse response analysis and the forecast error variance decomposition. The impulse response analysis suggests that an increase in ALMP lead to: (i) a decrease in the unemployment rate, and (ii)significant increase in labour force participation. More interestingly, results obtained from the error-variance decomposition analysis show that unemployment movements are not driven by shocks in the ALMP and that, especially in the northern regions, atypical contracts shocks account for a substantial portion of unemployment dynamics.ALMP; Beveridge Curve; GMM; P-VAR

Training Policy for Youth Unemployed in a Sample of European Countries

The aim of this paper is evaluating the impact of training on the employability of young long-term unemployed (18-24) within the EU. The analysis focuses on three countries representing different educational and training systems: Spain and Sweden are examples of a rigid and of a flexible sequential system, respectively; Germany is the best example of a dual educational and training system. Following a new wave in the literature on evaluation of employment policy, the paper attempts a target-oriented approach, as opposed to a programme-oriented approach. The effect of training on the labour market participation of young people is estimated by a multinomial LOGIT model relative to five labour market statuses: unemployment, employment, training, education and inactivity. The impact of the policy is analysed controlling for other important individual determinants, such as human and social capital endowment, the reservation wage and unemployment duration. The estimates provide little evidence in favour of a positive impact of ALMP in Spain and Germany. Only in Sweden the probability to be employed is significantly dependent on participation on training programmes. This result could be also due to the poor targeting of the policy to the weakest groups, especially in Southern European countries. It raises the issue of whether ALMP is a good instrument to fight youth unemployment and suggests a reform of the general education system could be more “effective”.european employment strategy; youth unemployment; active labour market policy; europe; regional unemployment differentials

The impact of institutions on Regional unemployment disparities

In this paper We explain the regional unemployment disparities in Europe using a set of institutional indicators trough an Econometric Panel data analysis. In particularly the aim of t he paper is to evaluate if the regional disparities in the unemployment rates are due to different economy structure and/or to institutional rigidity of national/regional labour markets. A Regional data set has been constructed in order to estimate the relationship between the unemployment rate, institutional factors, and some other variables that measure the regional productive structure(Amendola, Caroleo, Coppola, 2003).

The Impact of the Institutions on Regional Unemployment Disparities in Europe

The main aim of this paper is to study European regional disparities in unemployment, considering regional productive structures and some regional institutional variables. It is widely known that one most important stylized facts concerning the EU consists in regional disparities among regions. Such differences relate to both income per capita and the labour market, the latter generally measured in terms of unemployment rates. In a recent paper (Amendola, Caroleo Coppola, 2004) we have analysed the economic structure of the EU’s regions using proxies for the productive structure and the labour market. In this paper we estimate a panel data model where the dependent variable is the regional unemployment rate and the independent variables relate to the productive structure and some regional institutional aspects. The results confirm that institutional variables, such as the centralization of wage bargaining, the decentralization of public expenditure and the level of bureaucracy, have important impacts on unemployment rates.-

The Youth Experience Gap: Explaining Differences across EU Countries

This note aims to provide a theoretical framework to think of the youthunemployment problem and a classification of EU countries according to the way they address it.The key factor to explain youth unemployment is what we call the youth experience gap. To helpyoung people fill it in and ease school-to-work transitions, every EU country provides a mix ofpolicy instruments, including different degrees and types of labour market flexibility, of educationaland training systems, of passive income support schemes and fiscal incentives. Five differentcountry groups are detected whose outcomes in terms of youth unemployment are dramaticallydifferent: a) the North-European; b) the Continental European; c) the Anglo-Saxon; d) the South-European; e) New Member States. The Lisbon strategy provides guidelines in line with thetheoretical framework discussed here, but it is costly and hard to implement.Youth Unemployment Problem, Youth Experience gap, Youth Employment Policy, Lisbon Strategy

Talking about the Pigou Paradox: Socio-Educational Background and Educational Outcomes of AlmaLaurea

Italy has an immobile social structure. At the heart of this immobility is the educational system, with its high direct, but especially indirect cost, due to the extremely long time necessary to get a degree and to complete the subsequent school-to-work transition. Such cost prevents the educational system from reallocating the best opportunities to all talented young people and from altering the "typical" market mechanism of intergenerational transfer of human capital and social status. About ten years after the Bologna declaration and the "3+2" reform of the university system, AlmaLaurea data relative to 2008 shows a framework not much different from that of 2000. This is apparent by looking at the socio-educational background of university graduates. Parents' educational level seems to be the main determinant of the probability to get a university degree and to get it with the highest possible grade. As previous studies have also shown, the effect of the socio-educational background on children success at the university is not direct, but through the high school track. In fact, although any secondary high school gives access to the university, nonetheless lyceums provide students with far higher quality of education than technical and professional schools.intergenerational transfers, human capital, social status, Bologna declaration, "3+2" university reform, AlmaLaurea, Italy

Youth Unemployment and Youth Employment Policies in Italy

The labour market in Italy is characterised by the following structurally specific features: 1) Regional differentials. In 1996 the unemployment rate was between 7% and 10% in Central and Northern regions, while it was over 21% in the South where, moreover, the participation rate was also low, especially for women (37% in the North and Centre, 28% in the South);2) Unemployment is highest for young people. In 1996 the unemployment rate of the 15-29 year old labour force (25.8%), in Italy, was more than double that of the total working age population and the youth problem is much greater in the South where the unemployment rate of 15-29 year olds rises to 45.3%; 3) The low rate of employment is mainly due to the lower female rate of employment (36.2%) that is far inferior than the EU average rate of employment (49.7%). Why is the youth unemployment rate so high?-

Asymmetric Effects of National-based Active Labour Market Policies

Labour market policies settled at national level imply a “one-size-fits-all” labour market strategy. This strategy might not sufficiently take into account region-specific economic structures. We employ a panel factor-augmented vector autoregression (FAVAR) to evaluate whether active labour market programmes (ALMPs) might asymmetrically affect labour markets at regional level in a data-rich environment. The paper focuses on Italian regions. Our results suggest that while in the South employment is mainly driven by social and economic context variables, in the North the employment dynamics is significantly explained by policy interventions. Finally, we suggest two main policy implications. First, the success of active policies depends on the regional labour market conditions. Second, policymakers should adjust labour policy strategy to the regional economic structureActive Labour Market Policies, FAVAR.

Evaluating the Dynamic Effects of Active Labour Policies in Italy

This paper analyses whether active labour market programmes (ALMP) have differing effects on unemployment and employment dynamics according to the particular region in which they are implemented. To this end, it analyses alternative theoretical and econometric models thought to capture the possible effects of active labour market policies on labour force dynamics. The econometric methodologies implemented are the generalized method of moment (GMM) and the panel vector autoregression (P-VAR). The evidence yielded by the GMM models suggests that the effects of different ALMP on unemployment are dissimilar across the Italian regions. It follows that some active programmes are likely to have a greater effect in the South than in the North. The results of the P-VAR models estimated are synthesised by impulse response analysis and forecast error variance decomposition. The impulse response analysis suggests that an increase in total ALMP gives rise to (i) a decrease in the unemployment rate and (ii) a significant increase in labour force participation. More interestingly, the results obtained from the error variance decomposition analysis show that unemployment movements are not driven by shocks in the ALMP and that, especially in the northern regions, atypical contracts shocks account for a substantial portion of unemployment dynamics.ALMP, GMM, P-VAR

Regional differences in the European labour market

The European economy is characterised by marked regional differences. In this paper we shall propose some direct methods, using variables of the labour market, of economic branches value added to measure such differences and their evolution in time. In the first section we shall analyse regional disparities in unemployment, employment and the participation rate, while in the second section we shall implement a method of dynamic multivariate analysis -STATIS- in order to study the evolution of the regional structure of the European economy and labour market in the first-half 90's by using a set of regional (NUTS 1) economic indicators.