Economic Survey of Italy 2005: The economic impact of immigration

 

The following OECD assessment and recommendations summarise chapter 4 of the   Economic Survey of Italy 2005  published 18 May 2005. It covers one of the main challenges identified in chapter 1.

What role does immigration play?

Unemployment rates in the more prosperous Northern and Central regions are under 5%. The southern regions continue to register rates at least three times higher, and the gap has diminished only marginally since 1998. The chronic problem of low mobility of unemployed southern Italians towards the other regions perhaps influenced by the growing importance of equalisation transfers, is in contrast to the comparative success of immigrants in integrating themselves into the economy. Typically, immigrants, and especially illegal immigrants, arrive in the south of the country and head north to where the jobs are. Successive regularisation programmes have resulted in very large numbers of illegal immigrants joining the formal sector, thus widening the tax base and enhancing social security revenue.

Regional unemployment and productivity relativities1

1. North West region is taken as benchmark.
2. Estimations based on Istat data, for 2002 and 2003.
Source: Istat (2003), Rilevazione continua sulle forze di lavoro; Istat (2004), Conti Economici regionali.

However, Italy’s immigration policy is not well adapted to large scale inflows, perhaps a legacy from its past history of being an essentially emigration country. Official quotas for non-seasonal workers are relatively low and in practice linked to backward-looking labour-market assessments. Given that Italy’s immigrants appear to come looking for work, and finding it, a larger official quota for immigrants not tied to specific job offers might be appropriate. This will entail efforts in training and integration within the Italian labour market. Illegal immigrants could then be dealt with more firmly.

 

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A printer-friendly Policy Brief (pdf format) may also be downloaded. The Policy Brief contains the executive summary and the OECD assessment and recommendations, but does not include all of the charts available from the above pages.

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