Self-Employment in Italy

Abstract

:Self-employment has again become a focus of sociological and economic analyses as a consequence of the high levels of European unemployment. Observers and politicians have long believed that self-employment could be a good and cheap remedy for unemployment and lack of job creation. The debate continues, even now, when self-employment growth has stabilized. Labor economists formerly considered self-employment to be a function of labor market rigidity, that is, job security legislation. This article analyzes self-employment in Italy using longitudinal, retrospective job history data to test the hypothesis that ties self-employment to labor market rigidity. The focus is on the process of exit from unemployment to enter self-employment. A distinction is drawn between transitionsfromfirst-job search tqfirst employment as a self-employed worker and transitions from unemployment after some labor force experience. The article stresses that self-employment levels and entries in Italy seem to be better explained by macroeconomic factors than by labor market rigidity, and, indeed, that self-employment should be viewed from the perspective of a model that considers the conditions capable of fostering the development and creation of economic activities, that is, profits and employment. Instead of being second best, an expedient for the unemployed labor force that is excluded from the “primary” labor market, self-employment in Italy grows and develops precisely when the degree of economic development is greater.Moreover, the article stresses the roles of both institutional arrangement and the economic changes that took place during the 1980s-a phase in which the “Fordist” economic model was gradually replaced by the new “post-Fordist” economic order–as key factors to understanding self-employment trends in Italy.