The employment policy in Italy

This article discusses full employment policies in their general and theoretical terms and assesses their possibility of application in Italy. Firstly Vito examines the arguments provided by neoclassical theory against full employment policies. Secondly Vito examines the causes of unemployment in Italy: Vito declares his agreement with the view that unemployment in Italy, like in many backward countries, does not derive from a lack of aggregate demand, rather from a structural disequilibrium between a huge workforce population and the capital equipment needed to fruitfully employ it. Vito makes clear that a wide-ranging plan of public intervention is needed in order to cope with structural unemployment: the government should undertake a bold action to foster a better allocation of the available capital, to promote a steadier formation of new capital equipment, to address the strong territorial and social unbalances which prevent the achievement of full employment.