Labour policies trough sustainable finance - Finanziamento dell’Unione Europea – NextGenerationEU – missione 4, componente 2, investimento 1.1.

In Italy public spending on active labour market policies has been structurally lower than in the rest of European countries. The Covid-19 crisis has made the need for innovation to address mismatches and segmentation within the labour market even more apparent. The transition to a system of active welfare and labour market policies requires innovations both in terms of investments and in terms of organization. In recent times the possibility of large public investments has been further reduced. The European reaction to the Covid crisis has increased the possibility of public expenses. Nonetheless, the persistence of the economic instability and the rapid collapse of the geopolitical situation highlights alarming perspective for the future of public investment in employment policies, while new dimensions of fragmentation, fragility and vulnerability emerge in the labour market (for instance the problem of social and economic integration of millions of Ukraine refugees) and come out besides the more traditional ones (women's participation in the labour market, migrant workers, NEETs). In this scenario, the need to create new legal instruments to collect private resources to be allocated to the public intervention on the labour market increases significantly. The research project LABFIN aims therefore to explore all the possibilities to build up labour market policies though social investment and financial innovations, and to improve the understanding of social impact investing from both a legal and economic perspective. Within the social investing framework, we include two different products: pay by result products and socially responsible investments (SRIs), with a focus on social bonds. Adding the social dimension to a financial product may be a way to attract some investors and to increase financial market participation. In particular, the project intends to identify the social impact investing models that can be used more efficiently for the implementation of active labor policies and to study the main legal problems that they raise. The research project will also focus on the analysis of the market for social impact investing in Italy, defining the inclinations of investors toward the different forms of social impact investments. In this perspective, the project also aims to give a contribution to the scientific debate and the policy making process on the framework for social impact investing and to develop a set of good (and bad) practices for social impact investments addressed to fund active labour market policies.