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Anti-poverty measures in Italy: a microsimulation analysis

Nicola Curci (), Giuseppe Grasso (), Pasquale Recchia () and Marco Savegnago ()
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Nicola Curci: Bank of Italy
Giuseppe Grasso: Luxembourg Institute of Socio-Economic Research (LISER) and University of Luxembourg

No 1298, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

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 (search for similar items in EconPapers)
JEL-codes: C15 C63 H23 H31 I32 (search for similar items in EconPapers)
Date: 2020-09
New Economics Papers: this item is included in nep-cmp and nep-eur
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