Progettone – job matching for low-skilled workers

Abstract

Autonomous Province of Trento, Italy—

• The Progettone ("big project") is an innovative labour policy initiative that has been implemented in the Autonomous Province of Trento, Italy, since 1990.

• This programme matches unemployed people, predominantly older workers with low skills, to local needs, including infrastructure projects and community services.

• It has played an important role in alleviating the negative impacts of substantial workforce reductions that have severely impacted Trentino's manufacturing sector in recent years.

What are the objectives?

The global recessions of the mid-1970s and early 1980s had a profound impact on the Autonomous Province of Trento (commonly known as Trentino), a rural region in northern Italy that had transitioned from subsistence agriculture to industrialisation in just a few decades. Fierce competition from emerging economies and the closure or downsizing of major manufacturers posed significant threats to the region's economy. Strikes and demonstrations became frequent occurrences, with the looming risk of mass layoffs. In the face of layoffs at a Grundig plant in 1985, a television manufacturer employing hundreds of workers at the time, local policymakers created the Progettone programme.

Progettone matches unemployed people, predominantly older workers with low skills, to local needs, including infrastructure projects and community services. In this way, it helps ensure the continuity of income and pension entitlements until participants reach the minimum retirement age, while also addressing local community development needs.

How does it work in practice?

The programme consists of two streams: the primary stream and a seasonal stream. The primary stream places individuals in public works activities, with a specific focus on green projects, personal care services and cultural services.

Eligibility criteria for the primary stream includes the following:

• Unemployment status: recent termination of an open-ended contract with a private employer due to business-related circumstances or just cause resignation, with unemployment benefits expiring within six months.

• Age: men must be at least 53 years old, while women must be at least 49 years old at the time of job termination.

• Residency: a minimum of five consecutive years of residency in the Autonomous Province of Trento immediately preceding job termination, or a total of ten years of residency throughout one's lifetime, with at least one year of current residency at the time of application.

• Pension eligibility: a minimum of at least 15 years of pension contributions, with no more than 8 remaining years required to meet minimum retirement requirements (up to ten years for women with children).

The seasonal stream offers jobs in farming and tourism. For the seasonal stream, there are no requirements in terms of years of paid pension contributions or the number of years left before retirement age. All other criteria of the main scheme apply.

In terms of implementation, the Provincial Department for Labour plans, oversees coordination, and monitors the programme, but several other actors are involved throughout its implementation. Provincial employment services offices conduct outreach to participants, including validating their eligibility. Local municipalities identify projects for support in areas such as road renovation, maintenance of parks and water resources, cleaning of public gardens and woods, and other related activities. These are submitted to a dedicated unit within the provincial administration, which assesses the impact of these interventions on local communities. This evaluation considers financial resources, availability of the workforce, and other relevant factors. Based on this assessment, the Province selects the projects to be implemented and identifies the workers to be employed, via its employment services. Local co-operatives then deliver these projects and hire participants. This is based on a formal agreement with the Province, with the mediation of labour unions. This agreement ensures fair remuneration of labour costs, providing a mechanism for equitable compensation for the workers involved.

What has been the impact?

Over the past 25 years, Progettone has engaged over 8 000 workers. From 2006 to 2018, 80% of eligible workers participated in Progettone, and of those, 85% left their jobs upon reaching retirement age, aligning with the policy's objectives.

An evaluation of the programme focussing on 2018 revealed its significant impact on the local economy. During that year, the Province spent EUR 38.6 million to support over 1 800 workers. The direct savings, including the reduction in social security payments, additional social contributions paid, and public revenues generated from fiscal returns by firms and workers, such as income taxes and VAT, amounted to EUR 22.9 million. This translates to a net average cost per hour of EUR 5.3. The programme's interventions have demonstrated cost-effectiveness compared to outsourcing similar public works projects to other private market companies.

In addition to these direct savings, the programme generates multiplier effects for the local economy by stimulating spending on local goods and services. The evaluation estimated that in 2016, this multiplier effect effectively doubled the return on investment in the programme for the local economy.

What can other communities learn from this example?

• Importance of multi-stakeholder partnerships: Progettone demonstrates the importance of involving multiple stakeholders in the design and implementation of labour policies. The collaboration between local public administrations, trade unions and co-operatives has been instrumental in creating an effective and inclusive job placement model.

• Value of establishing long-term employment relationships in public works projects: a key strength of the model is its ability to establish authentic employment relationships, i.e. an open-ended employment contract which is further reinforced by a private collective agreement involving trade unions, co-operatives and the provincial government.

• Accounting for long-term impacts, not just short-term costs. The programme has yielded enduring benefits for the local economy. Through strategic investments in infrastructure projects and public services aligned with local needs, Progettone has not only stimulated economic activity but also created lasting employment opportunities and improved the overall well-being of the community. This underscores the significance of evaluating long-term returns and socio-economic impacts, even when substantial initial investments are required.

Further information

• Euricse (2021). L’impatto economico e sociale del Progettone, Euricse Research Reports, n. 20|2021. Authors: Eddi Fontanari, Sara Depedri & Carlo Borzaga. Trento: Euricse. http://www.naturambiente.provincia.tn.it/binary/pat_ripristino/presentazione/Rapporto_Progettone_20210519.1621845562.pdf

OECD resources

• OECD (2023), Trentino’s turnaround 1980-2020, Case study presented during the 82^nd Local Economic and Employment Development (LEED) Directing Meeting, Trento, Italy, 10 May 2023: https://www.oecd.org/cfe/leed/Trentino-turnaround-1980-2020-web.pdf.

• The Comeback Kid: How Smart Policy Turned Trentino Around (Mattia Corbetta and Wessel Vermeulen, 25 July 2023): https://oecdcogito.blog/2023/07/25/the-comeback-kid-how-smart-policy-turned-trentino-around/

• OECD (2014), The co-operative model in Trentino – Italy. A case study: https://www.oecd.org/cfe/leed/150202%20The%20cooperative%20model%20in%20Trentino_FINAL%20with%20covers.pdf