Full and effective implementation of recent reforms, including the Jobs Act and the Good Schools reform, would help boost growth in Italy by improving people’s skills and ensuring their more effective use across the country, according to a new OECD report.

OECD Skills Strategy Diagnostic Report: Italy 2017 says that the country is struggling more than other advanced economies to make the transition towards a thriving and dynamic skills-based society. The OECD Survey of Adult Skills (PIAAC) reveals that over 13 million adults – or 40% of Italy’s adult population – have low numeracy and literacy skills.

The report, presented in Rome by OECD Secretary-General Angel Gurría alongside Italy’s Minister of Finance, Pier Carlo Padoan, and the Minister for Territorial Cohesion and the Mezzogiorno, Claudio de Vincenti, identifies priority areas for future action. These include raising investment in higher education and vocational training, encouraging companies to invest in high‑quality training and scaling‑up resources for public employment services.

“Recent reforms are starting to pay off, with more than 850,000 new jobs created,” said Mr. Gurría. “Italy must now sustain this positive momentum to ensure that schools, universities and workplaces equip all Italians with the skills needed to succeed in the economy and society.” Read the full Speech.

The report says that Italy is currently trapped in a low-skill equilibrium where the low supply of skills is accompanied by low demand from firms. Small and often family-owned business account for more than 85% of all firms and about 70% of employment. But managers of many family‑owned businesses often lack the skills needed to adopt and manage new, complex technologies. Pay scales in Italy are also often related more to seniority than to performance. This reduces the incentive for workers to use their skills at work and invest in learning new skills. 

Skills mismatch is pervasive in Italy. Around 6% of workers in Italy are under-skilled while 21% are under-qualified. Over-skilled workers (11.7%), or those who report having the skills to perform a more demanding job, and over-qualified (18%) workers, or those with qualifications that exceed what is required for their job, comprise a big part of the Italian workforce. Around 35% of workers are also working in fields unrelated to their studies. Nearly one in four young Italians (aged 15-29) are neither in employment, education nor training ─ so-called NEETs ─ the second highest rate in the OECD.

More efforts are needed to improve teaching quality and bridge the performance gap between regions, according to the report. Increasing access to tertiary education is key, particularly for students from poorer families: the share of 25-34 year-old Italians with university-level education is just 20%, compared to the OECD average of 30%.

To encourage more adults to boost their skills, more part-time and distance learning programmes are needed, as well as improved access to childcare. Training subsidies aimed at low-skilled adults should be introduced.