The Italy Ministry of Labor is deploying over €5B in European cohesion funds to narrow the country's employment gaps, targeting two groups that have historically struggled in the labor market: young workers and women, especially in the South. According to Massimo Temussi, director of active labor policies at the ministry, this strategy addresses both interregional and intraregional disparities—the North-South divide as well as pockets of exclusion within wealthier regions.
Recent Progress and Positive Signs
The funding is showing early signs of impact. Female employment in southern regions has posted gains for the first time in nearly two decades, reversing a 19-year declining trend. Temussi emphasized that "the funding model addresses both interregional and intraregional disparities" and is being used strategically across regions.
Key developments include:
• Female employment reversal: After 19 consecutive years of decline, female employment in the Mezzogiorno is now growing.
• Sicily's strong performance: The island now ranks third nationally in use of cohesion funds for vocational training, trailing only Lombardy and Veneto.
• Youth employment focus: Approximately €2.8B of the €5B+ National Program "Youth, Women, and Work" FSE+ 2021-2027 is earmarked for youth labor market entry.
• Regional uptake expansion: All regions in the Mezzogiorno have increased their uptake of cohesion resources compared to the previous programming cycle.
The Funding Architecture
Italy's cohesion strategy hinges on the Fondo Sociale Europeo Plus (FSE+) and domestic co-financing, channeled through the multi-year National Program "Youth, Women, and Work." This €5B+ initiative, administered by the Ministry of Labor, allocates resources across four core priorities: youth labor market integration, female and vulnerable worker support, digital and green skills training, and modernization of public employment services.
According to ministry reports, a significant reprogramming in August 2025 shifted resources toward hiring incentives and introduced a new "Step" priority focused on cutting-edge competencies in new technologies, digital transformation, and ecological transition.
What This Means for Residents
For jobseekers, entrepreneurs, and employers in Italy—particularly in the South—the cohesion funds provide support mechanisms:
• Hiring subsidies: Employers who hire women or workers under 36 on permanent contracts can access social contribution exemptions. The "Decontribuzione Sud" scheme, which waives payroll taxes for southern employers, has been a significant tool for incentivizing hiring.
• Vocational training: Regional programs have launched training courses targeting unemployed and inactive residents in in-demand sectors like construction, mechanics, web development, and marketing.
• Work-life balance support: The National Recovery and Resilience Plan (PNRR) aims to expand early childhood education services, considered critical for enabling mothers to stay in or re-enter the workforce.
Broader Context: Employment Challenges Persist
Despite recent progress, Italy continues to face significant employment challenges. The national female employment rate remains lower than male employment, and the South lags considerably behind national averages. Youth unemployment rates vary significantly by region, with some southern areas experiencing rates well above the national average.
The cohesion funds operate alongside the Piano Nazionale di Ripresa e Resilienza (PNRR), which mandates that 40% of its resources flow to the South. However, implementation challenges—including administrative bottlenecks and limited project design capacity—continue to affect the pace of fund absorption in some areas.
Looking Ahead
The Supervisory Committee of the National Program "Youth, Women, and Work" continues to review progress and recalibrate priorities, focusing on NEET re-engagement, work-life reconciliation policies, and tools to measure gender parity in real time. For residents of Italy, especially in the South, the infrastructure for change is increasingly in place, though success will depend on effective program implementation and accessibility.
