Economics Thinking - Boosting Italy’s female labor participation

  • Among advanced economies, Italy has the lowest female participation rate (55%). Boosting it is not just a matter of social fairness, it is necessary to offset the negative growth spillover from a shrinking and aging workforce.
  • For both cultural and economic reasons, Spain is the natural eurozone comparison for Italy when it comes to boosting female labor participation. Starting in 2000, in less than ten years Spain managed to catch up with the eurozone average.
  • A less-pronounced gender pay gap for highly educated female workers and a homogenous rise in the participation rate across regions is what sets Spain apart from Italy. In terms of family-friendly policies, the difference between the two countries is not substantial.
  • Both Italy and Spain need to look at the Nordic experience to find the right balance between family-friendly tax systems and in-kind transfers, which appear to be an effective means of supporting female labor participation in these countries.

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