OECD (2017), OECD Economic Surveys: Italy 2017

OECD Publishing, Paris.

Table of contents.

Basic statistics of Italy, 2015 or latest year available.
Executive summary.
The economy is recovering.
Despite ambitious reforms, doing business remains complicated,thus hindering productivity.
Reforming education and active labour market policies will improve inclusiveness.
Assessment and recommendations.
The economy is recovering gradually from a deep and long recession.
Reforms to improve the business environment and increase productivity.
Reforms to boost inclusive and sustainable growth.
References.
Annex. Progress in structural reforms.

Thematic chapters.

Chapter 1.
Promoting a private investment renaissance.
Speeding up insolvency procedures.
Enhancing competition and improving regulation.
Encouraging innovation and investment in knowledge-based assets.
Addressing bank lending constraints.
Boosting alternative sources of finance.
Policy recommendations.
References.

Chapter 2.
Enhancing employability and skills to meet labour market needs.
The Italian labour market faces several challenges.
Labour market reforms to boost employability.
Raising skills that match labour market needs.
Policy recommendations.
References.

Boxes. 1. Main elements of the Industry 4.0 Plan.
2. Fighting poverty.
1.1. Knowledge-based capital.
1.2. Main elements of Italy’s bankruptcy regime.
1.3. Main elements of Italy’s Industry 4.0 Plan.
1.4. Italy’s patent box.
1.5. The development of a distressed debt market in Japan.
1.6. The Yozma Fund and the origins of the Israeli venture capital industry.
2.1. Defining and measuring skills, mismatch and shortages.
2.2. The probability of being mismatched.
2.3. Employment protection legislation and qualification mismatch: Evidence from the “Fornero reform”.
2.4. The Good School Reform.
2.5. Learning from well-performing dual-VET Systems in OECD countries.

Figures.
1. Output and productivity growth are recovering.
2. Italy’s well-being outcomes are mixed.
3. Regional dispersion in well-being is high.
4. Private consumption is driving the recovery.
5. Labour market participation rates are increasing.
6. The unemployment rate is declining.
7. Export is not adding to the recovery as in past recoveries.
8. The Jobs Act and social security contribution (SSC) exemptions have jolted the labour market.
9. Confidence has declined but remains high while bank loan disbursements keep falling.
10. The crisis hit investment hard and the productive capital stock is falling.
11. The public debt to GDP ratio has stabilised.
12. The public debt path is uncertain.
13. Value-added tax (VAT) collection is low.
14. Non-cash payments are low in Italy.
15. Social security contributions are high.
16. Capital ratios exceed thresholds whereas return on assets is low.
17. The stock of non-performing loans is large.
18. Italian banks’ share price has suffered.
19. Financial system risk has increased over time.
20. The decline in bad debts will be gradual.
21. Labour productivity growth is declining.
22. The productivity of firms at the technological frontier has been declining, contrary to other OECD countries.
23. There is scope to reduce fragmentation in metropolitan areas.
24. Average firm level labour productivity is higher in areas with more efficient public administration.
25. Public administration efficiency raises firm’s performance.
26. The impact of increasing public administration efficiency is larger for small firms.
27. EU structural and cohesion funds.
28. Efficiency of insolvency procedures is low.
29. Restrictions to product market competition have eased.
30. R&D spending and the number of researchers are low.
31. Business investment in fixed and knowledge-based capital (KBC) is low.
32. The number of patents is low.br /> 33. Research productivity is high.
34. Tax subsidy rates on R&D expenditures.
35. Debt equity ratio of non-financial corporations is high because of low equity.
36. The poverty rate has increased and remains high, especially for the young.
37. The transfer system is poorly targeted and can do more to reduce poverty.
38. The Jobs Act together with the reduction is social security contributions have tackled labour market duality.
39. The level of skill mismatch is high.
40. Skills of Italians are low across all levels of education.
41. Reducing the jobseeker-to-staff ratio would increase the effectiveness of PES.
42. There are clear improvements in school results but they are still below the OECD average.
43. Tertiary education participation and incentives to invest in high education are low.
44. Green growth indicators for Italy.

Chart.
1.1. Low investment is dragging down potential output and labour productivity growth.
1.2. Investment has dropped markedly.
1.3. The fall in investment was larger in services and widespread across regions.
1.4. Growth of non-residential capital services.
1.5. Business investment in fixed and knowledge-based capital (KBC) is low.
1.6. Efficiency of insolvency procedures is low.
1.7. Restrictions to product market competition have eased.
1.8. Start-up dynamics.
1.9. Product market restrictions are still high in retail trade.
1.10. Service trade restrictiveness index (STRI).
1.11. R&D spending and the number of researchers are low.
1.13. Research productivity is high.
1.14. Allocation of National Research Programme funds.
1.15. Share of R&D spending by institutional sectors.
1.16. Tax subsidy rates on R&D expenditures.
1.17. Lending interest rates have fallen but loan disbursements have recovered onlyslowly.
1.18. Loan disbursement is still on a downward path.
1.19. The stock of non-performing loans is large.
1.20. The decline in bad debts will be gradual.
1.21. Policy measures helped to lower the NPL ratio in Japan.
1.22. Debt equity ratio of non-financial corporations is high because of low equity.
1.23. The venture capital industry is underdeveloped.
2.1. The Jobs Act has made the labour market more flexible and improved the unemployment benefit system.
2.2. Unemployment rates are decreasing, but are still high, especially for youth and the long-term unemployed.
2.3. Too many young in Italy do not work or participate in training or study.
2.4. Non-participation rates are especially high for women and in southern regions.
2.5. The share of temporary contracts is high and the transition rate to permanent contracts low.
2.6. Skills of Italians lag behind those of people in other OECD countries.
2.7. The level of skill mismatch is high.
2.8. High share of under-skilling is associated with low skill levels.
2.9. The share of under-qualified workers is the highest among OECD countries.
2.10. In the South under-skilling prevails in the North over-skilling.
2.11. Gaps in the likelihood of being mismatched explained by worker and job characteristics as compared to a well-matched worker.
2.12. There is a large scope to boost productivity by reducing skill mismatch.
2.13. Over-skilled or over-qualified workers earn less and have lower job satisfaction.
2.14. The Jobs Act together with the exemption of social security contributions have boosted hirings and permanent contracts.
2.15. Estimated impact of the “Fornero reform” on the probability of being well-matched.
2.16. Spending on active labour market policies is low.
2.17. Reducing the jobseeker-to-staff ratio would increase the effectiveness of PES.
2.18. School results have improved but they are still below the OECD average.
2.19. Drop-out rates are high with big geographical dispersion.
2.20. VET in upper-secondary education is well developed in Italy.
2.21. Labour market outcomes of tertiary graduates are unattractive.
2.22. The offer of higher technical VET programmes remains concentrated in most industrialised regions and female participation is low.
2.23. More effort needs to be put in upskilling the labour force.
2.24. The risk of job loss due to automation is high.
2.25. Many adults lack computer skills.

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