Labour market

In the fourth quarter of 2020, labour market dynamics are still affected by measures to contain health emergency. The labour input, as measured by hours worked, declines by -1.5% compared to the previous quarter and by -7.5% compared to the fourth quarter of 2019; GDP contracts by -1.9% and -6.6%, respectively.

The number of employed grew by 54 thousand units (+0.2%) compared to the previous quarter, due to the increasing number of permanent employees – greater than the decline in fixed-term employees – and to the moderate growth in the number of self-employed. At the same time, the reduction in the number of unemployed (-122 thousand) is higher than the reduction in the number of inactive aged 15-64 (-10 thousand).

In a year-over-year perspective, employment is still declining (-414 thousand, -1.8% compared to the fourth quarter of 2019), even if permanent employees increase by 98 thousand units (+0.7%); instead, fixed-term employees mainly decrease (-383 thousand, -12.3%), but also the self-employed continue to decline (-129 thousand, -2.4%). The reduction involves both full-time and part-time employees, among whom the incidence of involuntary part-time reaches 65.2% (+1.3 points).

The number of unemployed decreases (-172 thousand, -6.7% compared to the fourth quarter of 2019), either those seeking their first job and those with previous working experiences, and the increase in the number of inactive people between 15 and 64 years old intensifies (+403 thousand, +3.1% in a year).

The employment rate, which is 58.2%, grows quarter-over-quarter (+0.3 points compared to the third quarter of 2020), but is still -0.8 points lower than in the fourth quarter of 2019. The unemployment rate decreases, both in conjunctural and year-on-year terms, while the inactivity rate – among people aged 15-64 – increases especially when compared with the fourth quarter of 2019.

On the enterprise side, the labour demand continued to grow up quarter-over- quarter even if to a lower extent in comparison with the previous quarter: both part-time and full-time jobs increased by 0.3%. By contrast, on an annual basis, total employee jobs continued to record a decline by 1.7%, a reduction that affected more heavily the part-time component (-3.4%) than full-time (-1%). The hours worked per employee showed a small drop on a quarterly basis (-2.9%) and a more evident one on an annual basis (-7.4%). The use of short-time working allowances grew up to 92,5 hours per 1,000 hours worked. The job vacancy rate dropped compared both to the previous quarter and the same quarter of the previous year (respectively by -0.1 and -0.3 percentage points). Labour cost decreased by 0.6% on a quarterly basis, as a result of a slight increase in wages and salaries equal to 0.5%, and a sustained decrease in social security contributions equal to 3.5%. On an annual basis, labour cost increased by 0.5%, following a growth in wages and salaries (+1.5%) and a decrease in social security contributions (-2.3%). The decline of social security contributions observed in this quarter, was a result of the adoption, in the second half of year 2020, of social contributions’ relief, aimed at relaunching economic activity.

The 2020 average is the synthesis of the quarterly dynamics of the labour market, strongly and differently influenced by health emergency: the year-over-year growth of employment in the first quarter was followed by the consistent decline in the second quarter that continued, if at lower rates, also in the third and fourth quarters of 2020. On the average of one year, it is observed an exceptional fall in employment (-456 thousand, -2.0%), associated with the decrease in unemployment and the strong growth in the number of inactive. Furthermore, the reduction of jobs (-1.7%) and of total hours worked (-13.6%), as well the increase in the use of short-time working allowance hours (+139.4 each 1,000 hours worked), are more pronounced in services than in industry.

Direct statistical surveys and data collection from administrative sources for statistical purposes have been affected by the current health emergency. Corrective actions have been carried out in order to counteract its statistical effects and to ensure processing and dissemination of data for the fourth quarter of 2020. It should be noted, however, that the estimates presented in this press release are provisional – also in the consistency of some indicators from different sources – and may therefore be revised on the basis of further analysis and more extensive and complete information when available.