Current Economic and Social Situation
Since the 1990s, the Italian economy has been suffering from a long period of sluggish or no growth. After 2007, Italy faced a series of dip recessions, which resulted in a rapid deterioration of the quality of life of her population.
The reasons behind the country’s poor economic performance since the 1990s are numerous and controversial ranging from its public debt, a sclerotic bureaucracy, low productivity rates and falling competitiveness – mainly linked to relatively high unit labour costs, excessive regulation, lack of R&D spending, an excess of small sized businesses -, political instability, inefficiency, corruption and uncompetitive marketable services (Ciocca 2007: Ch. 12 & 13). The 2008 international crisis, therefore, hit Italy in a peculiar way, compared to other Eurozone countries, making recovery less a question of cutting expenses and bailing out the financial and bank system, than a demand for far-reaching structural reforms of the public sector and the business environment (Ciocca 2010). The international crisis of 2008 aggravated, if anything, the political and economic instability Italy has been struggling with since the early 1990s.
While all the Eurozone had a double digit growth in the last 15 years, the Italian economy did not grow at all. It grew very slowly even in the first half of 2000 when the Spanish economy, for example, rose by 17 %. After the crisis, even though Italy avoided any bank bailouts and the direct intervention of the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF) – the so-called ‘Troika’, the country’s recovery has been very weak. Compared to the same period in 2008, Italy’s economy still shrank the most among both core countries – France, the UK and Germany – and some peripheral countries, including Spain, in the second quarter of 2015. Italy’s was the only one to contract in 2014 among major European economies, and in the first half of 2015 it grew at half the speed of the average of the Eurozone. In the 2 years to the second quarter 2015 the Italian GDP rose by a meagre 0.4 %, while the UK gained 5.7 %. Whatever the main reasons of “steady and prolonged decline in growth” (Tiffin 2013: 3) the consequences included lost of employment, productivity, output, savings, impoverishment of its population and lack of confidence.
Unemployment levels started to slowly decline last year but, at just below 12 % of the population, they still are close to the all-time high since the 1960s. Both the EC and the IMF forecast the level to remain above the country long-term average until 2020. In Italy the level of unemployment is still much lower than in other Southern European countries – in Spain and Greece it varies between 22 % and 25 % – but it also hides a more general deterioration of the labour market (Ballestrero 2012; Carinci 2012). As in Italy it is relatively difficult to dismiss employees, especially in the public sector, there has been an increase of poor quality employment and unemployment among the most vulnerable groups, like the youth. According to Eurostat (2015) Italy’s youth unemployment reached 41 % in August 2015, the third largest in the Eurozone after Greece (48 %) and Spain (49 %). Both youth and total unemployment rates are higher among the female population. The crisis resulted in a narrowing of the gender gap in employment rates among all advanced countries. In Italy, this kind of convergence takes place at a slower pace, in that a higher proportion of women in working age were inactive, mainly because of a lack of job opportunities and rewarding careers. This is particularly worrying, as according to OECD nearly half of the Italian female population (45 %) is inactive, the third largest proportion after Turkey and Mexico. The same source shows that Italy has the second largest proportion among advanced countries after Chile for marginally attached workers, i.e. people not in the labour force because they were too discouraged to look for jobs, but willing and available to work. It also ranks third among advanced economies after Spain and the Slovak Republic for proportion of people that are working part-time because they could not find a full time job.
Over 25 % of total employees in Italy are self-employed, the second highest proportion in Western Europe after Greece. The figure is, to some extent, inflated by the fact that many self-employed are de facto working full time for a different employer, since there is a lower tax wedge for independent contractors. Still, self-employment can also be seen as a survival strategy for those who cannot find any other means of earning an income. Those who do find jobs are employed with largely precarious contracts. According to the OECD more than half of the youth (15–24 years old) were in temporary contracts in 2014. Despite the current government’s claims on the positive impact of the recently approved “jobs act”, only one third of the new contracts registered between January and July 2015 were permanent.Footnote 1 On the other side, those that are unemployed tend to be so for a long period with the risk of having rising difficulties in re-entering the labour market. Nearly 60 % of unemployed in Italy have been so for more than 1 year, the fifth largest among OECD countries and a rapid rise from 49 % before the crisis.
The result is that real disposable income has been rapidly deteriorating and it is now at lower levels than in the early 1990s, while it is over 60 % higher in the Eurozone. The deterioration of the labour market, in fact, is much more evident from data on poverty rather than from unemployment rates. According to Eurostat, the percentage of the population that is severely deprived is much higher in Italy than in other Western European countries (11.5 % in 2014 vs. 7.1 % in Spain and 5 % in France and Germany). The percentage declined from its peak at 14 % in 2012, but it’s still double than the pre-crisis period (Eurostat 2013).
Migratory Dynamics Before and During the Economic Crisis
Since the 2000s, Italy, together with Greece, Spain and the United Kingdom, has been one of the main immigrant-receiving countries in Europe (OECD 2011: 403–404). The international economic crisis has, of course, impacted on Italy’s migratory dynamics. The country still attracts significant numbers of immigrants, mainly because the backbone of its productive system, made of small and medium enterprises, is in labour-intensive sectors, like fashion, agriculture and food. Italy thus continues to present a positive net migration, even though the gap between those who enter and those who leave the country every year has been shrinking, especially since 2011. Total immigration into the country, i.e. including Italian returnees, went from roughly 527,000 individuals at its peak in 2007 to almost 307,000 in 2013. Despite this decrease, yet official data show that the net international migration amounted to considerable +142,000 units in 2014, +182,000 in 2013 and +245,000 in 2012. On the other hand, total emigration, i.e. including foreigners leaving the country, for the same period has doubled, passing from nearly 51,000 in 2007 to over 139,000 in 2014 (ISTAT 2015, 2014).
Focussing on Italian citizens only, there is a clear growing trend of Italian nationals moving their residency abroad. The 2014 and 2013 figures – respectively, 89,000 and 82,000 – are the highest in the last 10 years (ISTAT 2014, 2015). The net migration of Italian citizens has been negative already for most of the 1990s and 2000s but since 2009 the gap is widening. Nonetheless, according to ISTAT, the number of Italian emigrants has not reached yet the levels of the 1970s.
High rates of returns, a typical trait of historical emigration from Italy, are a feature of more recent emigration patterns too.Footnote 2 The numbers of Italians returning to their home country, though, are lower than they used to. For example, the non-foreign population that moved to Italy from abroad in 2012 was 20 % lower than in 2007. In the 5 years to 2012, 28,000 Italian nationals moved to Italy from Germany, the same number in the previous 5 years was over 51,000. Over the same period, Italians returning from Switzerland dropped from 24,000 to 13,000. According to Eurostat, in 2012 Italy had the smallest share of returning migrants among all European countries (excluding Cyprus and Luxemburg).
The foreign population residing in Italy is increasingly leaving the country. Over 11,000 Romanians – the largest foreign-born national group in Italy – left the country in 2013 together with nearly 2400 Moroccans and a similar number of Albanians. At the same time, the annual inflow of the same groups is declining. It needs also to be considered that documented immigrants leaving the country have no incentives – just as natives – to de-register as residents in Italy, since it would involve loosing some benefits there, such as access to welfare service and public health care. For example, while ISTAT counted about 1500 Albanians leaving Italy in 2011, the Albanian statistics registered nearly 7000 Albanian returnees from Italy for the same year. The explanation in the mismatch of the two data, apart from possible differences in collecting them, lies also in the above-mentioned reason.
Main Trends in the Current Emigration
As everyone who has familiarity with the collection of data on international mobility knows, it is difficult to say exactly how many people are leaving or entering Italy every year. Undocumented immigration is a known problem, but undetected emigration is also an issue. Italians living abroad have a legal obligation to register in the AIRE (Registry of the Italian citizens residing abroad) at consulates, provided they have the intention of staying in that country for at least 12 month. There are no real incentives to register, since failure to comply with the law is not sanctioned and, once registered into the AIRE, the citizens lose a series of benefits in the home country, such as their access to the health service of their region of last residence, to name one. In addition, most people might not know for how long they are going to stay abroad, especially when they move to another EU member state with temporary contracts or as jobseekers. Therefore, Italians abroad register only when they are in need of a service from the consulate, typically, after quite some time. Therefore, AIRE figures are, on the one hand, very likely to underestimate the presence of Italian workers abroad, especially when their stay is temporary. Despite that, the most recent data of the AIRE show that the stock of citizens officially residing abroad has increased impressively in the last decade and totalled more than 4.5 million nationals at the end of 2014 (see Fig. 4.1). Yet, according to AIRE data less than one in four Italian residents abroad is aged between 18 and 34; a proportion that has remained unchanged from before the crisis. Once again, AIRE figures prove they are not a useful source to understand current outflows from Italy, since they include not only people who emigrated long time ago, people born to Italian parents abroad, but most of all sizeable amounts of people who were born outside Italy and obtained citizenship by descent. According to the latest available data, in fact, between 1998 and 2010 at least 1,003,403 individuals got Italian citizenship by descent at Italian consulates abroad and were automatically added to the AIRE registry. 73.3 % of the total new Italian/EU passports were released in Latin American countries (Tintori 2009, 2012).
At the same time, the ISTAT data too, based on the changes of residence administrative source, under-estimate the real-time emigration flows, since they detect only the individuals that officially move their abode overseas. However, they still seem to be the best Italian source available to grasp the trends in current emigration. According to ISTAT, over 320,000 people left Italy between 2009 and 2012, 40 % more than the previous 4 years. Contrary to the conventional wisdom that holds that almost exclusively southerners contributed to Italian emigration, the majority of the recent emigrants came from the northern regions of Italy. In absolute terms, the largest flow of nationals emigrating from Italy in 2012 was to Germany, Switzerland, the UK and France. In 2013, for the first time the UK took over as the most favoured destination, followed by Germany, Switzerland and France. The data on the 2014 flows confirm the UK as a booming destination (see also Chap. 10). The average age was around 34 years old and there was a prevalence of males (57.6 %) over females (ISTAT 2014). The percentage of graduates on the emigrant population above 25 years of age has increased from 11.9 % in 2002 to 30.6 % in 2013. The increase of graduates among the emigrants is somehow expected, given the high competition for jobs in the international labour market, especially in the destination countries privileged by Italian graduates. The top five countries that attracted the highest percentage of highly educated Italians were, in 2013, the US (35 %), UK (33.9 %), Brazil (32.2 %), Switzerland (30.7 %), Spain (30.3 %). There is therefore a growing trend of graduates leaving the country, but the share is still by far a minority of the emigrant population. In the second part of the chapter, we will analyse better whether Italy is currently interested by “brain drain” or not (Table 4.1).
Main Destination Countries
As showed, according to ISTAT, the largest flow of nationals emigrating from Italy in 2013 was to the UK (almost 14,000) followed by Germany (11,400), Switzerland and France (around 8000–9000 to each country). In all those countries, between 2010 and 2013, the rise of emigration flow from Italy was the fastest since the mid-1990s. Once again, data should be taken as a source to grasp the magnitude or trends of current emigration, not as a source of precise information. Looking at destination countries’ data, therefore, might help, but even in this case we should put the data in perspective.
For example, if we look at the UK (see Chap. 10), according to the AIRE about 16,000 Italians registered through the local consulates in 2013, but if we consider how many Italians obtained a national insurance number (NIN) in the same year, a mandatory document that allows to work in the UK, then the figure rises to about 44,000. In 2013 the numbers of NIN allocated to Italians was 66 % higher than in the previous year, the largest increase since data is available. The annual inflow of registration is four times higher than its pre-crisis levels. Over 80 % of the Italian that were allocated a NIN in 2013 were below 34 years old. Forty-two percent were aged between 18 and 24, The NIN data, though, incorporate also Italians only by passport, that never actually lived in Italy, mostly Latin Americans of Italian descent that use the Italian nationality to enter the EU labour market freely (Tintori 2011). According to the UK census of 2011, in fact, nearly 10 % of the UK residents holding an Italian passport were born in Latin America. Moreover, the NIN registration is mandatory for temporary and seasonal work too and it is valid for life. Therefore the numbers cannot be used to assume the actual stock of Italians living in the UK and do not tell us much about the length of their stay. On the other side, the NIN registrations do not include Italian people that are not working in the country and yet live there.
In Germany the stock of Italians increased in 2013 at its fastest rate since the 1970s. Over 80 % of Italians (excluding students) living in Germany in 2012 had a degree in secondary/higher education. According to Swiss national statistics the inflow of Italian immigrants was at its peak in 1983, when it reached 12,000 people, it was below 7000 people per year in the decade to 2006, but then it jumped again and reached a record high in 2013 with over 13,000 Italian immigrants. This means that nearly 80,000 Italians officially entered Switzerland with a status of permanent residents in the 7 years to 2013 compared to half that size in the previous 7 years. To these figures, we should also add at least 60,000 so-called ‘frontalieri’ – Italian cross-border workers – who every weekday commute for work between the two countries. Even if we look at less favoured destination countries, Italian emigration appears to be on the rise. In Austria, immigration from Italy grew a 35 % in 2012 over the previous year, the fastest rate since consistent data were made available in 2002. The share of Italian immigrants aged 15–29 years old increased by 6 % points to 49 % between 2008 and 2013. In the Netherlands there is a similar rise of Italian immigration during the years of the crisis, especially of young people. Immigration data from other countries confirm the described trend too (Table 4.2).
An interesting exception is Belgium. Belgium recorded a long-term decline in Italian immigration that has not stopped during the years of the crisis, even if it is slightly milder. This is the result of two factors: a reduction in the influx of Italians since the 1980s – the net Italian migration flow is currently about even; and rising numbers of acquisition of Belgian nationality, which is automatic to third generation children. Despite the decline, though, Italians – together with the French – are still the largest foreign population in Belgium with over 150,000 individuals (Vause 2013; see Chap. 7).