Ageing And Employment Policies: Italy (Ageing and Employment by Organisation for Economic Co-Operation and Development

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By 2050, more than one in three Italians will be over the age of 65. This could result in a slow-down in economic activity, pressure on the sustainability of social protection systems and labour shortages in certain occupations. The scale and timing of these developments will depend crucially on future trends in the mobilisation of potential labour supply. Increasing female participation rates and maintaining older workers in the labour market will be of particular importance. Although reforms in the pension system enacted in the mid-1990s were important steps toward ensuring the sustainability of the system in the long run, the level of public spending on pensions is still one of the highest in OECD.

However, one has to bear in mind that the Italian picture predominantly reflects the high incidence of long-term unemployment in the South, where it is particularly concentrated among youth. In the other regions, the picture is one in which elderly people suffer most from long-term unemployment. 11. Brandolini et al. (2003) recently show that the unemployment rate might be even higher in the South by including among the unemployed people out-of-the-labour force with significant search intensity.

5 percentage points). This forecast highlights the crucial role of employment growth, and in particular that of older workers. As already mentioned in Chapter 2, this would imply a relatively radical departure from current labour market features, characterised by relatively low employment rates, particularly among women, older people and in the South. Further, the postponement in the age of retirement would gradually improve the balance between contributions paid and pension entitlements adjusted on the lengthening of life expectancy.

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