Labour Market Reform and the Beveridge Curve across Italian Regions.

A frontier approach is utilised to estimate a matching function (reparameterised as a Beveridge curve) on data for the main Italian territorial areas (North, Centre, South) throughout the 1990s. The Southern labour market proves to be much less efficient than that in the rest of the country, especially in the case of unskilled labour. This approach is then utilised to assess the impact on the Italian labour market of the 1997 Treu Act, which greatly fostered the development of temporary work in Italy. This Act appears to have engendered an increase in labour demand, especially in the North and in the Centre. However, there is evidence of an outward shift of the Beveridge curve in the South, particularly as far as unskilled labour is concerned. The Treu Act then reduced unemployment in the more developed regions of the country, but did not favourably affect the overall matching efficiency of the Italian labour market.