Between the budget and the EU

Government takes action on training and employment incentives

Negotiations are ongoing regarding the extension of tax relief for those under 35 and measures to encourage permanent employment

3' min read

Translated by AI
Versione italiana

3' min read

Translated by AI
Versione italiana

With a labour market driven by the over-50s – the bitter fruit of the falling birth rate (which is taking its toll on employment) – and the end of the NRRP, one of the key measures to support youth employment is to focus directly on reintegrating NEETs – that is, young people who are neither in education nor in employment – who, as we show in the other articles on this page, although their numbers are falling, are still numerous, particularly in the 30–34 age group.

Among the very young, a significant boost came from the sharp fall in early school leaving, thanks to the work carried out by schools and regional vocational training providers. This year, the figure is expected to fall to 7.3 per cent; a marked improvement on the already significant 8.2 per cent recorded in 2025 (we have met all EU targets ahead of schedule). Between 2019 and 2026, the proportion of young people who went on to obtain a sixth-form certificate or vocational qualification rose from 86.5 per cent to 92.7 per cent; in practical terms, this means that around 520,000 young people have been brought back into education – roughly equivalent to the population of Genoa.

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The Ministry of Labour’s e-learning project, Edo – which focuses on digital skills as part of the National Recovery and Resilience Plan (PNRR) and was developed in collaboration with the regions and the Department for Digital Transformation – has also sought to re-engage those under 29. Well, according to initial figures, over 41,000 under-29s have received training.

An important contribution also came from the active labour market programme, Gol, which is also funded by the NRRP. As at 30 June, a total of 4.3 million people had been enrolled in the scheme, exceeding all assigned targets, including the training of 1,056,403 people compared with the 800,000 originally planned. In April, according to the latest report published by INAPP, those under 29 accounted for 31.2 per cent of the total, amounting to approximately 1.5 million people. Out of a total workforce of just over two million, 42.1 per cent are under 29: this represents over 850,000 young people who have found employment lasting at least six months after being taken on by the programme.

Now that the NRRP has come to an end, attention is turning to the new EU programming period for 2028–34, which will be based on a model similar to that of the NRRP (namely, public-private partnership, given that it has worked rather well), with 27 national and regional partnership plans and the introduction of the new Competitiveness Fund. The resources available for the partnership and competitiveness plans amount to 865 and 509 billion respectively (both of these funds will cover training activities and employment services).

Well, retraining and/or active labour market programmes are certainly a first step. The government’s challenge now is to get more young people into quality jobs. This is also because, according to the latest ISTAT employment figures, in July the number of workers aged over 50 stood at just under 10.5 million, practically ‘doubling’ the figure for those under 35, which remained at 5.3 million. To narrow this gap, the Minister for Labour, Marina Calderone, is committed – ahead of the forthcoming Budget Bill – to strengthening the package of incentives specifically aimed at those under 35 and at converting fixed-term contracts into permanent ones. Specifically, we are referring to 100 per cent social security relief for 24 months, up to a maximum of 500 euros per month (650 euros in southern regions), which applies to the recruitment of unemployed people under 35 until 31 December 2026; and the total exemption, also for up to 24 months and capped at 500 euros per month, for employers who convert fixed-term contracts of less than 12 months into permanent contracts for young people under 35 who have never previously held a permanent position. This year, the exemption applies to conversions carried out between 1 August 2026 and 31 December 2026, without any interruption to the fixed-term employment relationships established by 30 April 2026. The aim is to extend these measures into 2027, perhaps strengthening them further (resources permitting). These two measures, moreover, form part of a package of incentives that also includes bonuses to stabilise the employment of women and within the Single Special Economic Zone (ZES) for Southern Italy, and they look rather promising. At least according to the government’s estimates, which suggest that this year they will lead to the creation (of all four tax relief measures combined) of 110,700 permanent contracts at a cost of around one billion euros.

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