Regional Support for the National Government: Joint Effects of Minimum Income Schemes in Italy

Abstract

This paper highlights the extent to which minimum income schemes in Italian regions improved the potential targeting and effectiveness of national minimum income measures introduced in 2017 and 2018. By exploiting detailed survey data on the income, wealth and living conditions of Italian households from the IT-SILC survey and applying micro-simulation techniques, I first provide estimates of the overall audience of potential recipients and assess the extent of low-income targeting. I then evaluate the extent to which national and regional minimum income schemes decrease poverty and income inequality indicators (i.e. the headcount ratio, the income gap ratio, the severe material deprivation rate and the Gini index). The results show that regional schemes broaden the set of potential recipients and the coverage rate of national schemes, while they only slightly decrease the incidence and intensity of poverty at the national level. Overall, the presence of complementary regional measures brings the national measure, namely the ‘universal’ Reddito di Inclusione, closer to other European minimum income schemes (using France, Germany and Spain as benchmarks) in terms of benefit adequacy. This provides evidence of the importance of taking into account programme complementarities and multi-level government interventions when evaluating the impacts of national policies.