[Excerpt] The possibly most important economic challenge in Europe is low economic growth in the medium run. Italy is no exception; its labour market is among the least performing in Europe. This is should not come as a surprise. Economic growth has been lagging in Italy for some 15 years. According to IMF data, only 3 countries out of more than 180 have had lower economic growth than Italy. It is also certainly the case that Italy still remains a relatively rich country, with a ratio between private net wealth and income that is one of the highest in the world. This wealth, however, is concentrated in the top 10 per cent of wealthiest households and, in particular, is held by relatively older generations. The disappointing performance of the Italian economy is also aggravated by population ageing and sharp fiscal consolidation induced by the debt crisis. In such economic context, it is very difficult to offer young generations’ relevant opportunities. In fact, in addition to this disappointing growth performance, it is important to notice that the Italian social system, its labour market and educational system are poorly designed to address the needs of younger generations. All these factors combined are causing a rising inter-generational conflict, a conflict that the current recession is aggravating even further. This paper provides two main contributions. First, it documents how this economic environment affects the level of employment and unemployment and the various related features in the Italian labour market. Second, it discusses some of the major institutional changes that took place in the Italian labour market, how they fostered a dual labour market where young generations are heavily burdened and what challenges for policy still remain ahead.