Abstract
In 2011 the legal retirement age in Italy was raised from 65 years for men and 60 years for women to 67 years for both by the year 2019. This reform remains controversial. Extending the legal retirement age has caused an increase in employment rates for the 55–64 age group . However, unemployed workers in this age group face difficulties in finding a job and in re-entering the labour market. The demanding family responsibilities of Italian women and the persistence of the gender wage gap result in lower levels of retirement pensions . Moreover, increasing the retirement age without improving childcare services and addressing work-life balance policies negatively affects the working careers of young women. Extended working life policies should be matched with gender sensitive activation policies to ensure equal access to work and age management policies to achieve better working conditions for older workers .
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Introduction
Italy has been affected by population ageing and it is characterised by significant gender inequalities both in the labour market and in the allocation of family caring roles between partners (paid versus unpaid working time). This chapter discusses gender inequalities in the labour market, in unpaid work distribution and in the health status of older people and extended working life policies .
Gender Inequalities in Paid and Unpaid Work and Employment Policies
The employment rate in Italy for women is still much lower than for men . In 2018 among the 15–64 age group , the employment rate of women was 49.5% and for men 67.6%. In the 55–64 age group these rates were 43.9% for women and 64.2% for men . Employment rates in the general population (15–64 years) decreased by four per cent from 2006 to 2018 for men and increased by seven per cent for women. The increase in employment rates in the 55–64 age group over the same period was higher for women (+101%) than for men (+47%). This is linked to the pension reform that increased the minimum retirement age along with an increase in the level of education of the 55–64 year age group (Istat 2016b). The gender gap in employment rates amongst the 55–64 age group is both high and stable: it was 21.9% in 2006 and 20.3% in 2018 (author’s analysis from Eurostat meta data). A gender gap to the disadvantage of women is higher in the South of Italy (Addabbo 2013). Increasing difficulties since the 2008 economic crisis have been experienced by women when returning to work after childbirth (Istat 2012) and the discouraged worker effect is prevalent among women (Addabbo et al. 2015). Approximately 68% of unemployed men and 65% of unemployed women in Italy (59.5% of unemployed men and 58% of unemployed women in EU) in the age group 55–64 were unemployed for 12 months or more in 2018 (compared to 49.2% of men and 50% of women in the age group 15–24 years) (author’s analysis from Eurostat meta data). These figures demonstrate the difficulties that older workers face in finding a job when they lose it or try to (re)enter the labour market.
Italy is characterised by a sharp inequality in the allocation of time over the lifecourse with women playing the key role in unpaid domestic and care work in later life, not only for partners and parents, but also for their children and grandchildren (Addabbo et al. 2012; Anxo et al. 2011; Aassve et al. 2012).
Flexible working arrangements and part-time work have increased for workers of all ages. The proportions of full-time employed or self-employed decreased from 86% in 2008 to 81% in 2018, while temporary contracts increased from 10% in 2008 to 13% in 2018 and a sharp increase in involuntary part-time work took place (from 5.8% in 2008 to 11.9% in 2018) (Istat 2019).
The Legislative Decree 148/2015 introduced a handover scheme for employers with the aim of allowing older workers to shift from full-time to part-time work while simultaneously hiring young workers. The scheme has been piloted at the local level without a wider diffusion due to the relatively high costs for businesses (Jessoula et al. 2016). Due to the high estimated costs of extensive implementation at the national level, the scheme is being introduced partially by businesses (Inapp and Ministero del lavoro e delle politiche sociali 2017). Age management policies are relatively rare in Italy (Inapp and Ministero del lavoro e delle politiche sociali 2017) although good practices can be observed in large (Aversa et al. 2015) and small-medium businesses (Checcucci et al. 2017) . Older workers in Italy appear to be less involved in ‘on the job’ training than other workers in Europe (Anpal 2018).
Although equality principles are guaranteed by the Italian Constitution and a legislative Decree in 2003 established a general framework for equal treatment in employment, there are still limits to the full application of the European Directive on Discrimination in access to employment and training (OECD 2018). Media campaigns and other actions to promote active and healthy ageing have been proposed by the government, social partners and non-governmental organisations (OECD 2018; Rospi 2018; Banfi and Fries-Tersch 2016) . Also, regional legislation relating to active ageing has been introduced and training courses have been promoted at the local level for older workers by using multiple professions funds (Inapp and Ministero del lavoro e delle politiche sociali 2017). Banfi and Fries-Tersch (2016) highlight a fragmentation of policies to support older workers at the local and regional levels with lifelong learning measures only being addressed at the national level.
Care Services
The Italian welfare system is heavily centred on family support . Family support and informal care are widespread compared to other EU countries (Bettio and Plantenga 2004). Early childhood education services are widely available for children aged over three years (Addabbo et al. 2018). Primary and secondary schools are mostly scheduled on a half-day basis which is difficult to synchronise with the paid work of parents. Childcare services for children aged under three are rationed and unevenly distributed across Italian regions (Istat 2016b). A significant amount of childcare is informally provided by grandparents (Arpino et al. 2014).
Fiscal austerity has led to cuts in public health spending (Istat 2016b) which can result in an increase of informal care work by women. There has been a shift towards home-based care for older people and the employment of migrant workers in Italian households. This raises important issues in terms of discrimination, equity and sustainability of the system (Bettio and Solinas 2009; Bettio et al. 2006; Bettio and Mazzotta 2011).
Pension System, Inequalities in Pension Income by Gender and Public Social Protection Expenditure
Major labour market and pension policy reforms have been undertaken in Italy in recent decades leading to a multi-tier system where the dominant pillar is made up of a notional defined contribution system based on contributions made by employees , and self-employed workers in the public and private sectors (European Commission 2015) . Some workers shift between employment and self-employment , a trend on the increase in the Italian labour market (Muehlberger and Pasqua 2006; Muehlberger and Bertolini 2008).
The second tier of the pension system is an income tested old age allowance of approximately €5,824 annually for a single person with an additional €190.26 for those aged above 70 years. Since 1992 the use of supplementary funds and private pension plans has been promoted through tax incentives. Individuals whose contributory pension is below the minimum level may be entitled to a minimum pension supplement that will allow them to reach an annual €6,524.57 pension income . Those without a contributory pension may be eligible for a means-tested tax exempt social assistance benefit from 65 years with a further increase when they are aged 70 years or over ( OECD 2017).
The 2011 reform increased the retirement qualifying age and linked it to life expectancy. The statutory retirement age prior to the 2011 reform was 65 for men and 60 for women. The pensionable age was gradually increased and by 2015 was set at 66 years and 3 months for men and women employed in the public sector . In the private sector , the pensionable age was also 66 years and 3 months for men , but 63 years and 9 months for women (European Commission 2015) . In 2018 the minimum compulsory retirement age for men and women was fixed at 66 years and 7 and it rose to 67 years in 2019) within the private sector . There is an incentive to postpone retirement both within the private and the public sector by increasing the length of contributions and the provision of a flexible retirement age band up to age 70, a band that will then move upwards due to the linking mechanism of life expectancy.
In 2016 a phased retirement scheme with subsidised part-time work was introduced aimed at employees reaching retirement age in 2018, being full-time employed and having paid the minimum contributions for the old-age pension . Under this scheme full-time employees were incentivised to switch to part-time work before retiring. However, this incentive does not appear to have been successful given the limited number of applications (OECD 2018).
At the same time, disincentives to early retirement have been introduced. Early retirement is possible without penalties only if men have paid contributions for 42 years and 10 months (41 years and 10 months for women). Individuals who retire under the age of 62 years received a reduced pension. Special provisions have been introduced for disadvantaged workers and for unemployed persons whose unemployment allowance has expired. A loan-scheme that can cover missing contributions also exists for these two categories of workers. Restrictions have been imposed on the length of time spent in hazardous jobs in order to be entitled for early retirement (OECD 2018).
Arduous/hazardous jobs are defined as particularly strenuous manual labour. A list of arduous/hazardous work was drafted in 2007 which includes work in tunnels, caves, mines, chambers with compressed air and asbestos removal work.
There is a progressive indexation of pensions which favours retirees on lower pensions ( OECD 2017).
The Law Decree 4, 28/01/2019 allows early retirement at age 62 (minimum) if the qualifying contributory years are at least 38 (‘Quota 100’) and this measure will be introduced over the period 2019–2021. Women are estimated to be under-represented within the eligible cohort (INPS 2019) due to their average lower contributory years and over representation in low paid and unskilled jobs (Canal and Cirillo 2019).
Workers who have reached the minimum level of contributions (40 years in 2008), can combine pension income with paid employment (as self-employed , project work or employees ). The latter type of contract is not possible for those who retired early while the possibility of combining different sources of income is limited when receiving disability allowances , pensions for those employees who are moving from full-time to part-time work, and workers receiving a minimum income or workfare subsidies (OECD 2018).
The different reforms of the pension system in Italy have resulted in a lively public debate between academics, politicians and social partners . In particular, the increase in the retirement age for those employees whose retirement age was postponed by the reform for several years has been contested by unions and political parties. System failures are also related to the lack of integration between pension reforms aimed at extending working lives and limited employment policies encouraging older workers to stay longer in employment (Banfi and Fries-Tersch 2016).
Other topics of discussion concern the issue of permitting workers in physically demanding and hazardous jobs to retire earlier (OECD 2018) and the impact of extended working life conditions. Special attention has been given to employees who found themselves unemployed and without a pension for several months after the new reform (esodati). This problem was largely underestimated by the government when implementing the pension reform .
Due to the age structure of the Italian population and challenges experienced by young people in accessing the labour market (often delayed and in precarious employment ) concerns have emerged regarding the sustainability of the pension system and the wellbeing of today’s younger generation when they become older. Moreover, attention has been given to the impact of the 2011 reform on productivity . Gabriele et al. (2018) show that the introduction of rigid regulations and increasing retirement age has undermined a sorting mechanism that previously resulted in the retention of only productive workers (since they were less likely to retire early) and that overall this has a negative impact on productivity .
Given the crucial role played by older women in caring for grandchildren and the rationing of childcare services for children aged under three, the extension of working life without an extension of childcare services could increase the difficulties experienced by young mothers returning to work (Verashchagina and Capparucci 2014) leading to a negative effect on their labour supply. One result of the introduction of the 2011 Pension Reform on older women’s labour supply in Italy has been reported by Coda Moscarola et al. (2016) who show that there has been an increase in sick leave taken by older women, especially those with a low income and living in the South of Italy where childcare facilities are less available.
Gender inequalities in employment rates and wages as well as in the length of careers and types of contract (women are more represented in part-time work than men ) generate gender gaps in pensions and a higher risk for women of not having a decent standard of living when they are older (Corsi and Samek Lodovici 2013). In 2015, of the total amount of old age pensions in Italy , 56% were received by men (Istat 2016a). According to EU-SILC 2010 data, men on average receive higher pensions than women by 31% in Italy (39% in EU) (Bettio, Tinios and Betti 2013). Moreover, by comparing gross yearly pension income , men’s income was €6,000 higher on average than women’s (Istat 2016a).
Disability benefits (including disability pensions and early retirement pensions due to a reduced capacity to work) represent 1.5% of GDP in 2012 compared to two per cent on average in EU-28 countries. Sickness and healthcare benefits amount to 6.8% compared to the EU 28 average of eight per cent. Retirement pensions amount to 14.2% compared to 11% in EU-28 countries, survivors benefits represent 2.6% compared to 1.6% in EU-28 (Author’s analysis from Eurostat metadata).
Debate on Extended Working Life
Pension reforms in Italy have been accompanied by widespread debate. The issue of pension reforms leading to an extended working life is still widely covered in the Italian media. The empirical evidence does not suggest that media coverage of the issue significantly increases information. However according to Boeri and Tabellini (2012), providing extensive information on the costs and on the functioning of the pension system encourages individuals to support pension reforms increasing retirement age . Sharing information is crucial for the successful implementation of the reforms (Tsarouhas 2012). The Greek case, characterised by limited public information, contrasts with the Italian government’s extensive information sharing and consensus building campaign (Tsarouhas 2012).
The latest pension reform path in Italy has seen conflict with social partners on the labour market reforms and discontent with international constraints on public expenditure and debt stimulating co-operation between government and social partners (Maino and Neri 2011). However, the ‘Fornero’ reform was imposed in a top-down manner, with very few opportunities for trade unions to influence decisions (Sacchi 2013). The 2011 reform was opposed by Northern League Party, which together with the Five Stars Party, introduced ‘Quota 100’, approved in 2019. Three major union confederations, the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil); the Italian Confederation of Workers’ Trade Unions (Confederazione Italiana Sindacati Lavoratori, Cisl) and the Union of Italian Workers (Unione Italiana del Lavoro, Uil) reacted in 2012 with a general strike to protest against the ‘Fornero’ Reform. This movement was also motivated by problems related to the living conditions of the high number of those former employees who found themselves unemployed and without a pension for several months after the implementation of the reform. Recently, following the Five Stars-League party approval of ‘Quota 100’, unions have protested against ‘Quota 100’ not considering it an effective way of tackling the problems still connected with the ‘Fornero’ reform. The unions are calling for a new more structural pension reform .
Health
Life expectancy and healthy life expectancy have increased in Italy (Istat 2016b). In 2005, women had a longer life expectancy at birth (84 years compared to 78 years for men ) than men (Burgio et al. 2009). However, men lived 85% of their years without disability compared to 75% for women.
Italy is characterised by regional heterogeneity in terms of available health infrastructures and services and this is reflected in self-perceived health status with a larger effect on older women’s health status (Addabbo et al. 2014; Pirani and Salvini 2012b). Lower educated older people have poorer health and lower life expectancy compared to the highly educated (Istat 2016b). Involvement in social interaction as well as in working activities have a positive effect on older people’s health status (Pirani and Salvini 2012a).
Lifecourse literature explores the impact of gender differences in the distribution of unpaid work in later life. By analysing retrospective data on the gender distribution of domestic and care work in the Survey of Health , Ageing, Retirement in Europe (SHARE) , Addabbo et al. (2014) found a poorer global health status and residual affective problems for women with children and who defined themselves as having the main responsibilities in care work. Life expectancy significantly differs according to socioeconomic status, with a higher life expectancy for the self-employed and a difference of more than five years between individuals with different socioeconomic statuses, thus confirming large health inequalities, a finding that brings into question the fairness of the Italian public pension system (Lallo and Raitano 2018).
Analysis of the SHARE-Life study merged with SHARE data on the health status of those aged 60 and above has been undertaken on the effect of quality of work dimensions on the health status of retired older people by gender (Addabbo et al. 2011). The effect of better scores in the socioeconomic and control dimensions of the quality of work are associated with better health status later in life for both men and women. However, poor physical working conditions (whether the work was physically demanding, characterised by an uncomfortable work environment, or by a heavy time pressure) have a negative effect on both men and women in all health dimensions (mobility, cognition, affection and motivation). This effect is statistically significant only for women, and the result can be linked to the ‘time pressure’ dimension of physically demanding jobs , and to the higher probability that women experience work-life balance conflicts because of their higher involvement in unpaid care and domestic work. For men, higher scores in the control dimension of their quality of work life, exposes them to the risk of facing higher affective problems in later life and this can be associated with a loss in men’s social sphere after retirement from a rewarding job or with the underdevelopment of caring and relational dimensions during their working life .
Conclusions
When compared to other EU countries the Italian labour market is characterised by a high gender gap in the participation of women in paid employment and a lower participation of older workers . Extended working life has increased especially for older women due to pension reforms increasing retirement age . While equality in pensionable age can contribute to the decrease of the gender gap in employment rates , the highly gender-segregated (both horizontally and vertically) Italian labour market requires attention by policy makers regarding the impact of extended working life on working conditions and on wellbeing by gender.
From a gender perspective , increasing the retirement age without allowing for an improvement of childcare services and work-life balance policies does appear to have a negative effect on young women’s labour supply due to a lack of support by grandmothers in the care of grandchildren which takes place in a still highly family-centred welfare system . Extended working life policies should also be matched with an improvement in gender sensitive age management policies in the workplace to achieve better work life balance conditions for older workers together with consistent and coordinated public social and employment policies .
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Addabbo, T. (2020). Italy. In: Ní Léime, Á., et al. Extended Working Life Policies. Springer, Cham. https://doi.org/10.1007/978-3-030-40985-2_24
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