Written by Leonardo Menichini
This policy brief will investigate the Italian National Recovery and Resilience Plan from a youth employment perspective. It will underline in detail the missions and objectives foreseen by the plan aiming to reveal their proposals and funding to assist young persons to enter the labour market and tackle youth unemployment.
The Italian National Recovery and Resilience Plan (NRRP)
The Italian Government formally submitted its final version of the plan on the 30th of April 2021 which was consequently approved by the European Commission in June 2021 (2021a). The Commission welcomed the reforms and investments foreseen by the Plan that “represents a comprehensive and adequately balanced response to Italy’s economic and social situation, thereby contributing appropriately to all six pillars referred to in the RRF Regulation.” (European Commission, 2021b).
The plan will be financed by €191.5 billion of which 68.9 billion transferred in grants and 122.6 billion in loans throughout the period 2021-2026 (Italian Government, 2021). In this regard, Italy is the EU Member State with the highest amount of funding to be allocated. (D’Alfonso, 2021). Concerning the plan, it consists of 6 Missions that embed a set of reforms and investments in the field of digitalisation and culture, green transition, sustainable transport, education, social inclusion, and health. (Italian Government, 2021)
Tackling Youth Employment
Concerning the youth unemployment issue, the plan does not have a specific chapter for young people, although targeted reforms and investments are outlined across the 6 Missions. Indeed, it is possible to encounter references to youth goals in Missions 1, 2, 4, and 5.
First of all, Mission 1 aims at enhancing young people’s digital competences through the new Digital civilian service; Secondly, Mission 2 has the objective to create more jobs in the European Green Deal’s framework; Thirdly, Mission 4 has the ambition to reform the entire education system and therefore filling the gap between education and jobs; Finally, Mission 5 proposes to build a more solid and legitimate combination between the adoption of active labour market policies and the national social pillar. (Italian Government, 2021)
In brief, the plan presents a holistic approach that includes direct and indirect impacts on young people. Accordingly, it seeks to expand job creation by means of employing the considerable amount of available funding and, simultaneously, it aims to give young people the necessary skills to enter the labour market through a reform of the education system. In addition, the ultimate objective is to recover the potential of young people to foster their growth and relaunch their fundamental role in society. (Italian Government, 2021)
To conclude, a study carried out by the Fondazione Bruno Visentini (2021) estimates that the targeted measures and investments will amount to €15,55 billion, which is 8.1% of the total funding. As outlined by the foundation, it is possible to distinguish, on one hand, direct measures for the youth generation, targeted precisely at young people, and, on the other hand, indirect and potential measures which are not strictly addressed to young people, but positively contribute to increasing youth employment. In the plan, the former amounts to €3.6 billion whereas the latter is about €11.9 billion.
As mentioned above, the Italian NRRP does not have a specific pillar for young people even though Article 3 of the EU Regulation establishing the Recovery and Resilience Facility (Regulation 241/2021) foresees the implementation of the pillar number6 concerning “policies for the next generation, children and the youth, such as education and skills.” Nevertheless, the Italian government decided to undertake a horizontal approach, spreading youth policies over other macro policies areas such as the Green Deal or the digitisation process. This decision presents some shortcomings, such as the difficulty to find exact indicators and milestones to be monitored by means of EU parameters, or the obstacle of gathering those measures under a unitary legislative framework for youth (Fondazione Bruno Visentini, 2021). In this regard, the other EU Member States such as France and Portugal aligned with the EU Regulation, including a specific chapter for youth, making social and economic impacts easier to analyse. (Fondazione Bruno Visentini, 2021)
The European Economic and Social Committee (2021) has highlighted the fact that “the Recovery Plan should present a more solid strategy on how to effectively tackle youth employment and reach out to NEETs (Not in Education, Employment, or Training)”, determining that the Italian Youth Guarantee program is not properly functioning. In addition, “the strengthening of the social security system and safety net that many young people will likely fall back on represents an important step, but the concrete measures are taken have to be in line with the policy recommendations and include all forms of work, including people in non-standard forms of work and those with precarious contracts.” (EESC, 2021)
In the Italian government’s assessment (2021), the impact of the NPRR would increase the youth employment rate at 3.2% in 5 years. Nevertheless, a study promoted by the National Youth Council (2021), on the impact of the NPRR on youth employment, foresees that only 85000 young people will enter the labour market from 2020 to 2026 whereas throughout the period 2013-2019 the amount was of 200000 new young workers.
Comparison with other EU countries
In 2021, Italy had the third-highest youth unemployment rate among the EU Member States (29,5%) following Spain (34.8%) and Greece (36,1%) and largely above the EU-27 average (16,8%) (Eurostat, 2021a). Additionally, Italy currently has the highest NEET rate (23.7%) (Eurostat, 2021b) in Europe. Conditions for the Italian youth are not as favourable as in other countries in Europe and, thus, reforms and massive investments are necessary. As illustrated below, it is possible to observe that a considerable number of EU Member States have committed more of their total funding to youth measures than Italy even though the latter will allocate the highest amount of money regarding youth measures, that is €15 billion (Darvas, et al. 2022).
Source: Bruegel Datasets
A revised National Recovery and Resilience Plan, based on feedback received by policy experts, should:
- Include a comprehensive pillar dedicated exclusively to young people in order to facilitate policy assessments and monitoring by experts.
- Reinforce the access of young people to the labour market by means of the implementation of active labour market policies and of the Italian Youth Guarantee.
- Acknowledge the importance of further taking into consideration precarious and non-standard jobs when conceiving labour policies.
This policy brief has outlined the role of youth employment measures in the framework of the Italian National Recovery and Resilience Plan. The Plan does not entail an explicit pillar for youth as other countries did, nonetheless, we encounter youth measures throughout the 6 Missions that amount to more than 15 billion euros. To conclude, whilst Italy foresees the highest amount of funding among EU Member States, the Italian NRRP, according to many observers, does not seem to have the capacity to adequately tackle the youth unemployment issue.