La Dolce Vita Eludes Italian Students Found Unemployable – Bloomberg 06-09-13

Salient to Investors:

The Italian higher-education system lets undergraduates linger on campus for years and retake final exams 6 times, and schools are disconnected from the economy and only recently opened campus career offices. No Italian schools, public or private, are in the top 200 in the Times Higher Education’s rankings of global universities. The OECD said Italy spent 1 percent of its GDP on higher education in 2009, versus 1.3 percent for the UK and 2.6 percent for the US.  OECD forecasts Italy’s GDP will fall 1.8 percent in 2013.

Francesco Pastore at the Second University of Naples said it is an incredible destruction of human capital, a steeplechase with no winners – everyone is losing. Pastore said once they finally graduate, students are ill-prepared for working life.

Young college graduates in Italy have among the highest unemployment rates in Europe, while those with jobs make only 9 percent more on average than those with high-school diplomas, versus 37 percent in other industrialized countries. Italians spend more time earning degrees and drop out at greater rates than their international peers.

Eurostat says the jobless rate overall was 12 percent for April, the highest in at least 36 years, and 41 percent for those ages 15 to 24. Only Spain, Portugal and Greece had higher youth unemployment rates in the 27 EU countries. The unemployment rate for Italians ages 25 to 39 with a college degree was 10.6 percent in 2012, and 11.1 percent for those with only a high-school diploma. The jobless rate of German college graduates was 2.6 percent, half that of people with only high-school degrees. The BLS says 8.3 percent of those 25 to 34 in the US were unemployed in 2012, and for all US college graduates 25 and older was 3.9 percent in April.

Giorgio Bellettini at the University of Bolgna said Italians in their 20s have traditionally been supported by their parents, making youth employment less critical, but the older generations now face job losses and cuts in pensions, so children are looking for work earlier, and showing up in unemployment figures.

Erik Jones at Johns Hopkins said Beppe Grillo’s Five Star Movement captured the youth vote and threatens to upend the political structure. Jones said the prospects of the unemployed in their early 30s getting a job are basically zero.

Dario Braga at the University of Bologna said historically, Italian universities were reserved for the wealthy, but changed in the early 1970s, when access was expanded to the masses, with low fees and few, if any, entry requirements – Merit became a bad word, and we are seeing the result of that. Braga said compensation at Italian universities is based on seniority and the schools are barred from paying their most talented scholars more to retain them, and who flee for higher paying jobs in the US and UK.

Read the full article at http://www.bloomberg.com/news/2013-06-09/la-dolce-vita-eludes-italian-students-found-unemployable.html

Click here to receive free and immediate email alerts of the latest forecasts.