Italy Employment, Unemployment and Productivity

By | February 16, 2022

The evolution of the Italian economy from 1960 onwards – which has been said so far – is the result of multiple economic and non-economic factors, which very often have their roots in the years prior to 1960. Therefore, for a better understanding the phenomena that conditioned the economic system of our country in the sixties and seventies, it is appropriate to provide a quick overview of some essential aspects of Italian economic life in the period 1951-73.

According to MYSTERYAROUND, this period in the development of the Italian economy is sufficiently significant as a historical phase distinct from the previous and subsequent ones: in fact, 1951 can be approximately coincided with the completion of the economic reconstruction of the country; and 1973 with the last year preceding the international oil crisis, which seems to have marked a decisive turning point in the evolution of the economies of Western countries.

The aspects that will be briefly examined concern the evolution of employment and productivity. For each of these aspects, the overall variation between 1951 and 1973 will be considered in order to identify long-term trends, regardless of the fluctuations from one year to the next. In some cases, however, in order to better highlight the evolution of the phenomena considered, mention will also be made of their trend in the subperiods 1951-62 and 1962-73. In addition, with regard to employment, the more recent 1973-76 period will be examined separately.

Considering first of all the labor factor, from tab. 15 it can be seen that overall employment had clearly differentiated trends in the two eleven-year-olds 1951-62 and 1962-73. In fact, while in the first period the total number of workers employed increased by 518,000 units, in the second period it decreased by 805,000 units. For both periods there was a decrease of almost the same order of magnitude in the number of employed in agriculture (2,830,000 units in the first and 2,620,000 in the second), a decrease which was mainly caused by people who had a marginal position in the sector that is, largely by women and assistants. The trend of employment in the non-agricultural sectors, on the other hand, is remarkably different, in which, in fact, an increase of 3,348 is recorded.

The change in total employment, positive in the first period (plus 518,000) and negative in the second (minus 805,000), obviously depends on the overlapping of changes in employment in the agricultural and non-agricultural sectors.

The causes of this trend in employment must be sought in the fact that the years 1951-62 were characterized by a profound transformation of the Italian economy, under the pressure of a sharp increase in exports and investments: a transformation that resulted in the decline of the role until then had from agriculture and in the creation of a remarkable industrial structure. In this period it was to some extent easy for the Italian economic system to secure employment for workers who abandoned agriculture and were willing to accept wages substantially anchored to productivity.

The subsequent period 1962-73 – troubled by two crises, in 1963-64 and in 1970-71 – was instead characterized by a process of adjustment of the structure of the system, by a decline in the accumulation rate, by a slowdown in investments. and by very large wage increases, almost always higher than productivity increases.

The consequence of all this has resulted in the impossibility, on the part of the extra-agricultural sectors, to fully absorb the exodus from agriculture which has continued to manifest itself due to a long-term irreversible trend and substantially inevitable due to the strong pockets below. -employment and unemployment existing precisely in this sector. In this regard, it should not be forgotten that Italy has a significantly higher percentage of the labor force involved in agriculture than that of various other countries. For example, in 1975 the percentage of agricultural workers out of total employed was 15.8% in Italy, 11.3% in France, 9.8% in Denmark, 7.3% in Germany, 6.6% in the Netherlands, 3.6% in Belgium and 2.7% in the UK.

The phenomena that characterized the trend of employment in Italy as a whole also manifested themselves in the two large areas of the country (center-north and south) in the sense that there was a strong reduction in employment in agriculture. in both periods as well as a very significant increase in extra-agricultural employment in the first period (1951-62) and less accentuated in the second (1962-73).

Given that the agricultural exodus in the Italian situation is to be considered substantially physiological, it can be assumed that to evaluate the progress made in the field of employment, only the variations in the number of employed in non-agricultural sectors must be considered. In these sectors it is noted that for the whole of Italy the increase in employment in the second period (1,815,000 units) is equal to just over half of the increase in the first period (3,348,000 units). This situation is reproduced in roughly the same proportion in the two large areas (in the Center-North 1,361,000 units in the second period and 2,476,000 in the first period; in the South, respectively, 498,000 and 872,000).

From the aforementioned figures it can be deduced, among other things, that from 1951 to 1973 extra-agricultural employment in the South increased more than in the Center-North (+ 55% against + 47%); which can be considered as a positive, albeit limited, result of the development policy of the South.

As regards the most recent years, it is noted that from 1973 to 1976 the total employment increased in the whole country by 503,000 units, as a result of a decline in agricultural workers, equal to 261,000, and a more consistent increase. the number of employees in the extra-agricultural sectors (+ 764,000). The number of people employed in agriculture decreased to a greater extent in the Center-North and less in the South, as can be seen both in absolute numbers (- 172,000 against – 45,000) and in percentage terms (- 11% against – 3%). The increase in employment in the non-agricultural sectors, on the other hand, was approximately the same in the two districts in relative terms (+ 4% in the Center-North and + 5% in the South) and therefore greater in absolute numbers in the first (+ 518,000) and in the second (+ 202,000).

The considerations relating to the trend in employment can be usefully integrated with the main data on unemployment in the years following 1973. From the surveys on the labor force, the data reported in tab. 16, which show unemployment rates of between 2.9 and 3.7% of the labor force.

It should be borne in mind that starting from January 1977 Istat restructured the quarterly surveys on the labor force, in order to provide more detailed information on the attitude of the population towards work. With these surveys, among other things, it was possible to identify unemployment fringes that previously escaped the surveys, consisting of people who, despite having declared on a first application that they do not belong to the workforce (housewives, students, pensioners, etc..), at a later request from the interviewer they said they were looking for work. Taking these unemployed fringes into account, the number of people looking for a job in 1977 was 1,545,000, that is 7.2% of the workforce.

In particular, in 1977 211,000 real unemployed were recorded, 693,000 people looking for a 1st job and 641,000 people declared not belonging to the labor force even if looking for a job. It should be emphasized that the unemployment rate is particularly high for women (12.5% ​​against 4.6% for men), for young people between 14 and 29 years (17.3% compared to 2.7% for other age groups) and in the South. The incidence of unemployment among young people aged between 14 and 29 with a high school diploma or degree is also remarkably high: in total the number of them looking for a job was 428,000, equal to 28., 1% of the workforce of the same age and with the same educational qualifications.

It should also be noted that out of a total of 1,545,000 people who declared themselves looking for work, only 701,000, equal to 45.4% of the total, had made an “active” search in the thirty days preceding the interview, while the remaining 844,000 people, equal to 54.6%, either had carried out research actions in a period prior to thirty days, or did not provide a valid answer to the relevant question.

From tables 17 and 18 it is possible to see what has been the trend of production in relation to that of the productive factors used – that is, the evolution of productivity – in the private sector of the Italian economy, excluding housing. As regards the product per work unit (table 17) it is noted that from 1951 to 1973 the greatest increase was recorded in agriculture (+ 263%). This result is essentially due to the exodus from the agricultural sector of a significant number of workers employed during the year only partially and in precarious and marginal activities. In industry and tertiary activities, on the other hand, the increase in output per work unit (respectively by 232% and 113%) can be attributed to an effective improvement in the efficiency of employees,

The product per unit of capital, as can be seen from the same tab. 17, increased by only 27% in the entire private sector, that is, much less than output per unit of labor. In fact, the stock of fixed capital used in each sector has increased almost in tandem with the increase in production.

A more precise measure of the variations in the efficiency of the Italian economic system in the period considered is given by the indices of global productivity (or technical progress in a broad sense), which are calculated taking into account not only one of the two factors of production. – labor and capital – but both at the same time and on the basis of the importance that each of them has in the production process. From 1951 to 1973 the efficiency of the Italian economic system increased overall by 162% (table 18). This improvement can be attributed not only to “technical progress” in the strict sense (introduction of more efficient procedures and machinery, organizational improvements in production, large-scale application of the results of scientific and technological research, etc.).

Italy Employment