Abstract

Only 36 units of full time labour are employed on a regular basis for every 100 working-age inhabitants in the south of Italy against 64 units in the other Italian regions. Employment in the Centre and North of Italy has increased by 10 cent since the early nineties, despite the strong competition of low-wage countries of Asia and eastern Europe, while it has remained substantially unchanged in the South; over the last two years employment has even diminished in southern Italy. In view of the large availability of well educated potential workers, Mezzogiorno could be the "new frontier" of Italian development; the real challenge is to switch the nature of southern unemployment from a dramatic political and social problem into a great opportunity for improving living standards of all Italian citizens. According to most of the economists attending the 2005 annual conference of "l'industria", this can be achieved if differences in productivity between the north and the south of Italy are fully compensated by differences in the price of labour.