Over the past five years, employment has risen everywhere except amongst young people. Here’s why
‘Between 2021 and 2026, the Italian labour market showed a positive trend, with a rise in the employment rate and a fall in unemployment. Employment growth affected all age groups except the youngest, being highest among the 50–64 age group (+7.8 percentage points), partly due to the gradual ageing population and pension reforms. In terms of employment contracts, stable employment is becoming more entrenched, with an increase in permanent staff and a simultaneous reduction in fixed-term staff’. This is highlighted by Istat in its regular Note on the trend of the Italian economy, covering July–August 2026.
The labour market is expanding
In Italia, in recent years – as highlighted by Istat – the labour market has seen employment grow, against a backdrop of significant economic and demographic changes and the persistence of certain critical issues of a structural nature. Over the five-year period from July 2021 to July 2026, a particularly positive overall picture has emerged, with an overall increase in the employment rate (+4.4 percentage points, approximately 1.6 million more people in employment) and a simultaneous decline in both unemployment (-3.4 percentage points, with 787,000 fewer jobseekers) and inactivity (-2.4 percentage points, with approximately 1.05 million fewer inactive people).
More and more young people are economically inactive, but better educated
The most significant rise in employment was recorded in the 50–64 age group (+7.8 percentage points), accompanied by a sharp fall in inactivity (-6.3 percentage points). Conversely, the youth age group (15–24 years), although characterised by a sharp fall in the unemployment rate (-8.6 percentage points), also showed a decline in employment (-1.2 percentage points) and an increase in inactivity (+4.1 percentage points), partly due to rising levels of education, which delays young people’s entry into the labour market.
The impact of raising the retirement age
The rise in employment – explains Istat – has been most pronounced amongst older age groups and has been influenced not only by the overall economic trend but also by two main factors. On the one hand, social security policies, characterised by a gradual rise in the state pension age, which has led to a prolongation of the time individuals spend in the labour market. Added to this, as already mentioned, was the gradual rise in educational attainment, which delayed entry into the labour market and, consequently, also delayed exit in order to meet the minimum contribution requirement.
The ageing population
On the other hand, as Istat points out, the ageing of the Italian population is significantly altering the country’s demographic structure. In particular, the gradual decline in the population aged under 50 has been accompanied by an increase in the number of people over 50. This shift in demographic composition has also been reflected in the structure of employment, leading to an increasing proportion of older workers within the total workforce. Between July 2021 and July 2026, the change in employment among 50–64-year-olds was an increase of 18.0 per cent, whereas, net of the demographic component, it would have been 13.0 per cent.
