Immigrant Labour in the Context of Demographic Change, Youth Unemployment and Job Mismatches: The Case of Italy

English

This thesis explores the impact of immigrant labour inflow on labour market segmentation in Italy. In particular, it explores the potential of immigrant labour to resolve challenges caused by a demographic transition and a shrinking workforce in Italy as well as relative shortages of labour and skill mismatches in the labour market. This question is of relevance because: Italy on the one hand has the largest share of ageing population amongst European countries with 22.6% aged 65 and older , while on the other, it faces the challenge of high youth unemployment with 32% of population between 15 and 25 being out of the work force in 2018 . Further, the country has witnessed a spike in immigrant labour with foreign residents in Italy amounting to as much as 11 % of the total population in 2021. In this context, massive immigrant labour inflow is seen as a potential solution to supplementing a diminishing working age population and thereby increasing the working age population ratio and the population size in general. It is also seen as a means of filling in gaps in the labour market caused by labour shortages due to skill mismatches and task preferences of native workers in sectors of the Italian economy. The study has found that even when foreign-born workers in the Italian labour market have similar characteristics with regard to educational level, gender, place of residence and age group they are unlikely to compete with Italian workers for jobs. Rather, they occupy very different sectors from an occupational perspective within the Italian labour market. Foreign born workers on an average tend to perform tasks demanding hard physical labour while native workers tend to specialize in tasks of a sedentary nature that require higher level of skills and formal training. The study and analysis in this thesis taken together point to the possibility of immigrant labour being a potential and promising means to resolve the problems faced by an economy with an increasingly ageing workforce and with large scale skill mismatches. Further, the contribution of immigrant labour could be seen as a likely means of avoiding a slump in growth rates of the economy and thereby maintain the standard of living of the entire population. Keywords: Demographic change, Immigration, Labour markets, Skills, Mismatches, Human capital, Employment.