Italy’s brain drain

Italy’s brain drain

Written By Marissa Tay Kai Fang

 

Meet Giuseppe Conte [1] – an ex-professor of private law who now serves as Italy’s prime minister, and the face of the first populist government in Western Europe. His election into office has created unsettling emotions in the European Union (EU), especially since he might be the driving force behind a potential referendum in Italy as citizens express their discontent towards the economy. Yet, how does this man’s sudden rise to power reflect the influence that economic indicators have on the ever-changing political scene? Perhaps it is due to the relationship between the country’s youth unemployment rate and changing age demographic of eligible voters.[2]

Figure 1: Employment rates of recent graduates, up to 3 years since graduation[3]

As much as we complain about the stress and worries that come with working life, we cannot deny that it serves as a source of income for us to splurge on our unlimited wants.

Rising unemployment reflects a decrease in demand for labour, mainly due to firms opting to cut production costs. Italy may be the fourth largest economy in the EU, yet its youth unemployment rate stands at 33.1% as of April 2018[4]. This number is significantly greater than the EU’s youth unemployment rate of 15.2% during the same period[5]. Figure 1 reflects the employment rates of recent graduates in the EU – Italy stands at the bottom of the chart, with the second lowest employment rate, meaning that job opportunities are scarce and competitive.

Figure 2: Youth unemployment rate of under 25 year-olds, Italy vs the European Union[6]

Figure 2 indicates that Italy’s youth unemployment rate might be on a downward trend, but the same could be said about the youth’s confidence in local job market. In 2015, 36.7% of the 107,529 Italians (approximately 39,463) who emigrated were from the youth demographic, proceeding with their search for better job prospects abroad. This number is expected to continue rising should securing a job at home prove to get tougher overtime and there is already evidence to support this claim. In 2017, there was a 23% increase in youth emigration to 48,600. This economic frustration is perhaps one of the reasons for the shift in voting preferences.

Director General of LUISS University in Rome, Mr Pier Luigi Celli, expressed his concern that Italy ‘is no longer a place where it’s possible to stay with pride…having finished (your) studies, take the road abroad”. [7]

In Italy, labour demand by companies has now become scarce, and youths now have to decide on whether to stay or leave the country to advance their career. This is a true example of what economics is about – the study of choices; understanding why individuals make decisions under certain conditions.

Simply put, Mr Conte’s election into office represents the changes that citizens want to see in their country. There is no definite answer to whether Italy’s job market will improve overtime, but hopefully this article serves as a justification to how inextricably woven economics and politics are.

 

 

Reference

[1] Thelocal.it. (2018). Who is Giuseppe Conte, the political novice now Italy’s populist PM?. [online] Available at: https://www.thelocal.it/20180521/giuseppe-conte-italy-profile-five-star-movement [Accessed 18 Jul. 2018].

[2] Statista. (2018). Age distribution of the population 2015-2030 Italy | Forecast. [online] Available at: https://www.statista.com/statistics/754687/age-distribution-of-the-population-in-italy/ [Accessed 18 Jul. 2018].

[3] Romei, V. (2018). Five economic challenges for Italy’s next prime minister. [online] Ft.com. Available at: https://www.ft.com/content/cfb5baae-00e5-11e8-9650-9c0ad2d7c5b5 [Accessed 18 Jul. 2018].

[4] Tradingeconomics.com. (2018). Italy Youth Unemployment Rate | 1983-2018 | Data | Chart | Calendar. [online] Available at: https://tradingeconomics.com/italy/youth-unemployment-rate [Accessed 18 Jul. 2018].

[5] Tradingeconomics.com. (2018). European Union Youth Unemployment Rate | 2000-2018 | Data | Chart. [online] Available at: https://tradingeconomics.com/european-union/youth-unemployment-rate [Accessed 18 Jul. 2018].

[6] Romei, V. (2018). Five economic challenges for Italy’s next prime minister. [online] Ft.com. Available at: https://www.ft.com/content/cfb5baae-00e5-11e8-9650-9c0ad2d7c5b5 [Accessed 18 Jul. 2018].

[7] Faris, S. (2018). Arrivederci, Italia: Why Young Italians Are Leaving. [online] TIME.com. Available at: http://content.time.com/time/magazine/article/0,9171,2024136,00.html [Accessed 18 Jul. 2018].