How fine targeted is ALMP to the youth long term unemployed in Italy?

This paper attempts a qualitative and quantitative evaluation of the ability of the Italian Active Labour Market Policy (ALMP) to target long term youth unemployed. The European Employment Strategy (EES) has given a new impulse to ALMP as the main tool to fight long term youth unemployment. It has also stressed the need for continuous monitoring and evaluation of the results obtained. However, while monitoring is now established, little evaluation has been carried out so far. After providing up to date evidence of the size and features of youth unemployment in Italy, we show that the measures implemented include reforms of the education, training and employment systems and direct incentives to employ young workers. This suggests all the evaluation studies based on individual programmes are insufficient and an overall evaluation of the impact of the programmes on the employability of the workers involved is needed. The results of the econometric analysis, based on individual level YUSE data, suggest qualification and work experience are the most important determinants of job finding, especially in flows to employment in the formal sector. However, training and participation on ALMP does not significantly improve the employability of young workers. A number of reasons could explain this apparently surprising result. Especially in Southern regions, micropolicies could be totally ineffective because of the generally negative labour demand conditions. Moreover, expenditure on ALMP is very low (less than 1% of GDP in 1999), compared to the very high unemployment level. Thirdly, a substantial institutional and financial poverty still characterises labour supply policy. Finally, structural reforms, such as those relative to the educational system, require time to be completed and to produce their expected outcomes. In the meanwhile, workers involved in training programmes face the prospect of falling into a sort of "training trap".