ABSTRACT
In order to understand future directions of the Italian labour market, it is useful to examine past trends. A comparison between the employment patterns in Italy and in several other countries during the period 1950-65, shows that Italy was one of the most flexible labour markets: employers were able to vary the number of employees with a very high degree of freedom (Brechling and O’Brien 1967). These conditions reflected excess supply in the labour market and the weakness of
the unions. During this period, the unemployment rate in Italy as well as other European countries was about 2-3 per cent of the labour force. As in other EU countries, economic growth during the second part of the 1950s and the beginning of the 1960s led to the achievement of virtually full employment and then increasing pressure of excessive wage demands. Unions gained strength and successfully bargained for large wage concessions as well as a greater control of the hiring and firing process. This new climate, created by the laws contained in the Statuto dei lavoratori (1970), established many regulations on recruitment and dismissal and placed restrictions on employers’ autonomy in the field of redundancies. The Italian legislation has instituted many rules for the hiring of workers. Employers were to hire the first workers on a list drawn up by the public Employment Agency, independent of its own preferences for individual workers. The ranking imposed by the public agency and controlled by the unions was defined on the basis of social criteria (essentially the length of unemployment and family size).
