Unemployment expectations across heterogeneous groups

Abstract

Relying on ISAE Italian data on consumers' unemployment expectations, we analyse the process of unemployment expectations formation across different socio-economic groups, distinguished according to their working condition. We find that employees are unable to correctly incorporate the effects of the Biagi Law. This evidence seems to show that these agents do not consider the new forms of temporary job, resulting from the application of Biagi Law, as proper “employment†and hence do not correctly interpreted them as a reduction in the unemployment trend. This aspect may provide some preliminary explanations for the evidence of Italian consumers'' pessimism about the dynamics of the labour market, despite the falling of the unemployment rate occurred in Italy during the last years.