The Transition from University to Work - The case of Italy

The investment in a tertiary education cycle should favour the search of a job, at least concerning who is less qualified. The reason why in Italy this is not always true and why the transition university-to-work depends on several factors: first of all, youth occupation has different characteristics if compared with other workers. It is more sensitive to the economic cycles, showing, in general, anti- cycle behaviour (Jimeno, Rodríguez-Palenzuela, 2002).

This does not exclude the possibility that it can be critical even during times of positive economic growth, since it is strongly dependent on how institutions are efficient in fostering the transition schoolto- work (Caliendo, Künn, Schmidl, 2011). Considering the current crisis, O'Higgins (2012) states that different opinions, from literature and from various international institutions, have marked the youth as one of the most strongly hit categories of workers by the recession. Second, the duration of youth unemployment is another important aspect.

The longer is the time spent being unemployed, the graver is the damage for the worker: there is not only the risk of scarring effect, but also the possibility of human capital obsolescence, losses in competitiveness, disincentive and/or impossibility to update skills and knowledge. Additionally, there is a high probability of accepting jobs for which the workers is overskilled or overeducated, although it rises a mismatch, but it avoids to stay into unemployment for a long time (Caroleo, 2012). Again, O'Higgins (2012) claims that when long period unemployment is more widespread, the effects of the recession in the exit and entry flows in the unemployment state are stronger.

Economic fluctuations can hit youth occupation in different ways. Considering the labour demand side, shocks due to technological changes, deindustrialization, outsourcing, can modify the requirement of skills and competencies, numerically and on a qualitative level (Caroleo, 2012): for example, it’s possible to think of the positive relationship existing among technological innovation and qualified work demand (Layard and Fallon hypothesis) and to the consequences on the matching between labour and demand supply, in terms of time and information asymmetry (that is, the low adaptability of the labour supply in the short run) (Barr, 2004; Caroleo, 2012).

Talking of technology and rigidity of short run labour supply, it’s important to mention the skill biased technological change, i.e. the growth of unemployment rate in the short run. This is due to a radical technological change, regardless the type and level of qualification, because of the shortage of skills, necessary to treat the new implemented technologies. However, even in this case, youth are the part of workers that risks more, because irrespective of education level, the lack of experience could negatively affect their ability to deal with the shock (Caroleo, 2012).

The transition from university to work is also affected by some structural characteristics of the economy. In Italy, the crisis has deepened the pre-existing weakness of the country. The difficulty in absorbing the high qualified labour force (more difficult than employing the less qualified one) is due to a structural shortage of investments in human capital, both by firms and workers, besides the aggregate demand drop. This is a great hindrance to the valorisation and the right exploitation of the growth potentialities of the country (Blasutig, 2011).

The prevailing type of entrepreneurs in Italy and the entrepreneurs’ level of education can be another factor influencing the graduates’ demand, which are more required where the technological content of the production is high and/or entrepreneurs are more educated than the compulsory level, at least with respect the traditional family management (Almalaurea, 2012).

The chances of occupation for youth graduates depends also on the personal decisions about how investing in education, in quality and quantity. This choice in turn depends on individual economic possibilities, on personal willing and abilities, on the scholastic and university system, on the familiar background, on the expected return from education investment. Checchi (2003) states that the participation to the tertiary education is highly positively correlated with the educational level of the parents, called “cultural constraint”. He considers it more important than the liquidity constraints, overall because it can strongly affect the decisions taken after the secondary school (i.e. continue to study or start to work).

If in a certain socio-economic context there are no perspectives to satisfy returns from the accumulation of human capital, the individual prefers not to invest in education or, if he does it, he shows an inclination to move towards economies with more possibilities. This is happening in South Italy, from where new migration flows are leaving mainly in two directions: from South to North Italy and from South to abroad. Migration in the opposite sense is almost irrelevant (Di Pietro, 2005). In fact, it seems that the investment in tertiary education can produce results only if there is a subsequent event of migration, with consequent losses of human and social capital for the country (De Novellis, Ferraris, 2009).

Internal migration is encouraged by previous migration due to study: the push factors are just the high unemployment rate and the attendance at a university in a place different from hometown. Migration decision can be considered in these cases as a signal of the transition from university-to- work. So, it seems that the more a person is educated, the stronger is the incentive to migrate, overall if she is from the South. This mobility is the result of the disequilibrium between qualified labour demand and supply, and – although it reduces the pressure on the supply side – it is a proof of the political incapability of managing the problem of unemployment and attracting (and developing) human capital in Italy. [...]