Immigrants in a segmented and often undeclared labour market

This article develops a systematic analysis of available data on foreign workers in the Italian economy. Their presence reflects the fragmented character of Italian labour markets and the particular importance in Italy of the 'hidden economy'. These factors alone explain why Italy experiences simultaneously a shortage of labour and high labour costs, from which the demand for foreign labour has resulted. The study uses both official data and the findings of a number of secondary studies in the field to show how foreign workers participate in all the lower branches of employment and in some sectors have become the predominant group. However, the presence of foreign workers varies considerably by sector and by region, in turn reflecting certain structural features of the Italian economy. The study concludes by arguing that the presence of these foreign workers in the Italian labour market serves to perpetuate its flexibility, in some cases by complementing and in others by substituting for the indigenous labour force. © 2004 Taylor & Francis Ltd.