Anti-Poverty Measures in Italy: A Microsimulation Analysis

56 Pages Posted: 13 Oct 2020

See all articles by Nicola Curci

Nicola Curci

Bank of Italy

Giuseppe Grasso

University of Luxembourg - Luxembourg Institute of Socio-Economic Research (LISER)

Marco Savegnago

Bank of Italy

Pasquale Recchia

Bank of Italy

Date Written: September 29, 2020

Abstract

Introduced in 2019, the Reddito di cittadinanza (RdC) has replaced the Reddito di inclusione (ReI) as a universal minimum income scheme in Italy. In this paper, we use BIMic, the Bank of Italy’s static (non-behavioural) microsimulation model, to measure the effects of the RdC in terms of inequality reduction and, as a novel contribution, of absolute poverty alleviation. Our results, which do not account for behavioural responses to policy changes, show that the RdC is effective in reducing inequality, and attenuating the incidence, and even more so the intensity, of absolute poverty. We also document how certain features of the design of this benefit affect the distribution of these effects across the population. For this purpose, we simulate two hypothetical changes to the current design of the RdC: one that directs more resources to large households with minors (on average more in need than other households) and the other that takes into account the differences in the cost of living according to geographical areas and municipality size.

Keywords: microsimulation model, redistribution, poverty, minimum income, progressivity

JEL Classification: C15, C63, H23, H31, I32

Suggested Citation

Curci, Nicola and Grasso, Giuseppe and Savegnago, Marco and Recchia, Pasquale, Anti-Poverty Measures in Italy: A Microsimulation Analysis (September 29, 2020). Bank of Italy Temi di Discussione (Working Paper) No. 1298, Available at SSRN: https://ssrn.com/abstract=3710131 or http://dx.doi.org/10.2139/ssrn.3710131

Nicola Curci (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Giuseppe Grasso

University of Luxembourg - Luxembourg Institute of Socio-Economic Research (LISER) ( email )

Kirchberg, 6, rue Richard Coudenhove-Kalergi
Luxembourg
Luxembourg

Marco Savegnago

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Pasquale Recchia

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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