Dynamics of Persistent Poverty in Italy at the Beginning of the Crisis

Abstract

We propose an analysis of the persistent at risk of poverty (PARP) rate in Italy at the beginning of the Great Recession (2007–2010). Italy represents an interesting case study because it has one of the highest PARP rates in Europe, together with a weak labour market, an inadequate social security system, and a pronounced territorial dualism. EU statistics on income and living conditions (EU-SILC) longitudinal data are used. Logistic regression is applied to disentangle the relationship between household and main earner characteristics and the likelihood of being persistently poor. According to our results, male employees are more likely to hamper persistent poverty for their households; the opposite holds true for women as family breadwinner. Human capital endowment also shows a relevant role in preventing persistent poverty. The presence of children, instead, makes households more vulnerable. The South disadvantage slightly decreases at the beginning of the crisis. This is due to the worsening economic conditions in the North and Centre, affected to a wider extent by the economic downturn. The Italian welfare system appears ineffective in protecting worse-off households, and policies aimed at protecting employment, supporting women labour force participation, the elderly, and households with children would be needed.

Keywords: Poverty, Persistent poverty, Longitudinal data, EU-SILC, Italy

JEL Classification: I32, C25