The job market is growing, employment has reached an all-time high (24.4 million) and the unemployment rate (15-74 years) is also at 5.6%; at the same time the participation rate reached 67.0 percent in the second quarter of 2026, returning to rise after some quarters of substantial stationarity (+0.5 percentage points compared to the first quarter). However, despite the progress achieved in recent years, there remains a large pool of people (around 4 million) who, despite gravitating around the job market, are unable to enter it (the so-called potential workforce).
The data
This is written in the Public Finance Programmatic Document. Inactivity rates remain particularly high among women and young people aged 15-24 (41.3 and 78.4 percent respectively), still well above the European average (28.4 and 59.6 percent). In the second quarter of 2026, the labor market slack (LMS) indicator, which fell significantly from 2021 but rose slightly in the last quarter, was equal to 14.3 percent of the extended workforce, 3.3 percentage points above the European Union average. The data, writes the DPFP, "signals the existence of an unused labor reserve capable of supporting participation and potential growth".
Potential workers
But what is this potential labor reserve? We are talking about the unemployed, but also about underemployed part-time workers, about potential labor forces, i.e. individuals who are looking for a job but are not immediately available (active unavailable) and those who, despite not looking for it, would be available to work (inactive available). After remaining above 20 percent for over a decade, in mid-2026 the slack (as the phenomenon is called among experts) fell to 14.4 percent of the extended workforce (sum of workforce and potential workforce), a level however still higher than the EU average (11.8 percent). The gap reflects above all the high incidence of available inactive people on the extended workforce (7.2 percent compared to 2.6 in the EU); the weight of the part-time underemployed (1.6 percent) and the unavailable active workers (0.2 percent) is more limited, although lower than the EU average (respectively: 2.4 percent and 0.9 percent).
The audience
In absolute terms, coinciding with employment growth in the post-pandemic period, slack fell to 4.0 million people in the second quarter of 2026, approximately half of the 2014 peak (over 7.9 million) and a value currently in line with that of Spain and lower than that of France. The main component is made up of the available inactive people (around 2.0 million), followed by the unemployed (1.49 million).
Women and young people
The slack remains uneven in composition and is concentrated in groups with lower participation in the labor market, i.e. women and young people. This heterogeneity mainly concerns the available inactive people. Among these, women prevail, who, despite the decreasing trend of the last decade, still represent around 55 percent of the total (with a reduction of around 7 percentage points since 2010); in terms of incidence, the available inactive people correspond to 8.0 percent of the extended workforce for women, compared to 5.7 percent for men. From a demographic perspective, the majority is concentrated in the 25-54 year old range (64 percent, from the peak of 66.7 percent in 2021), while 15-24 year olds and 55-74 year olds account for 16 and 19 percent respectively.
