ABSTRACT
This chapter summarises the development of the Italian economy since 1973 and the disparities between North and South. It highlights the need to rethink wage-setting mechanisms as a strategy to relaunch the economic development of the South. Among the major Organization for Economic Co-operation and Development countries, Italy has the smallest share of part-time work on total employment. The increased participation rate of women in the 1980s was the main reason why increased labour supply in Italy was only partially offset by an increase in labour demand. The growing differences between women in the labour markets of the two macro-areas demonstrate that the territorial dimension of labour-market imbalances in Italy intersects with the polarisation of the Italian labour market between different segments and groups of workers. The rationing on the demand side for jobs in the primary segment of the labour market dissuades many potential workers from even entering the active workforce.
