Labour policies in a deflationary environment
in Making work more equal

This paper addresses two issues, analysed from the point of view of the Italian case. The first, relates to the increasing inequality in the labour market. In Italy, the increasing dualism of the labour market has been depicted as an insider-outsider problem, created by the ‘excessive’ protection of standard employment relations. Consequently, the recent legislation aimed at reducing the regulation of the labour market has been presented as a necessary step towards greater equality. The second issue relates to the search for viable models to address the challenges of technological change in a globalised and competitive environment. Here again, the decade-long stagnation of Italian productivity has been ascribed to the insufficient flexibility and excessive protection of the labour market. This chapter contrasts the short-term competitiveness effects of austerity/flexibility policies with the long-term efficiency effects deriving from a greater commitment of both the employer and the employed workforce. The view of social policy as a productive factor is embedded in the conviction that sustained growth and decent working conditions are the result of the interactions between macro-policies and labour outcomes, and great risks can spring from neglecting the systemic consequences of generalised, pan-European austerity.

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Making work more equal

A new labour market segmentation approach

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