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Winners and Losers in the Italian Welfare State: A Microsimulation Analysis of Income Redistribution Considering In-Kind Transfers

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  • Daniela Sonedda

    (SEMEQ, Università del Piemonte Orientale)

  • Gilberto Turati

    ()
    (University of Torino)

Abstract

In this paper we consider income distribution in Italy, and evaluate the redistributive impact of in-kind transfers by using SHIW data provided by the Banca d’Italia. The analysis is conducted at the household level, comparing families with different needs by means of equivalence scales. We consider both cash and noncash income transfers, looking in particular at health services and educational services. Our results show that -in a given year -redistribution in Italy (as in other industrialised countries) is operated mainly through cash transfers, while the redistributive power of in-kind transfers appears to be limited, and their impact on income distribution less than that obtained with direct taxation. Recent pensions reforms will probably reduce cash transfers, and call for new ways of redistributing income.

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Bibliographic Info

Article provided by GDE (Giornale degli Economisti e Annali di Economia), Bocconi University in its journal Giornale degli Economisti e Annali di Economia.

Volume (Year): 64 (2005)
Issue (Month): 4 (December)
Pages: 423-464

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Handle: RePEc:gde:journl:gde_v64_n4_p423-464

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Related research

Keywords: in-kind transfers; income redistribution;

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References

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  1. Cannari Luigi & D'Alessio G., 2002. "La distribuzione del reddito e della ricchezza nelle regioni italiane," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 4, pages 809-848.
  2. Roland Benabou, 1999. "Tax and Education Policy in a Heterogeneous Agent Economy: What Levels f Redistribution Maximize Growth and Efficiency?," NBER Working Papers 7132, National Bureau of Economic Research, Inc.
  3. Boadway, Robin & Marchand, Maurice, 1995. "The Use of Public Expenditures for Redistributive Purposes," Oxford Economic Papers, Oxford University Press, vol. 47(1), pages 45-59, January.
  4. Sergio Beraldo & Daniel Montolio Estivill & Gilberto Turati, 2005. "Healthy, Educated and Wealthy: Is the Welfare State Really Harmful for Growth?," Working Papers in Economics 127, Universitat de Barcelona. Espai de Recerca en Economia.
  5. Pirttila, Jukka & Tuomala, Matti, 2002. " Publicly Provided Private Goods and Redistribution: A General Equilibrium Analysis," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(1), pages 173-88.
  6. Smeeding, Timothy M, et al, 1993. "Poverty, Inequality, and Family Living Standards Impacts across Seven Nations: The Effect of Noncash Subsidies for Health, Education and Housing," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(3), pages 229-56, September.
  7. Disney Richard, 2004. "Are contributions to public pension programmes a tax on employment?," Economic Policy, CEPR & CES & MSH, vol. 19(39), pages 267-311, 07.
  8. Lindbeck, Assar & Persson, Mats, 2002. "The Gains from Pension Reform," Seminar Papers 712, Stockholm University, Institute for International Economic Studies.
  9. Maria Rosaria Marino & Chiara Rapallini, 2003. "La composizione familiare e lÂ’imposta sul reddito delle persone fisiche: unÂ’analisi degli effetti redistributivi e alcune considerazioni sul benessere sociale," Temi di discussione (Economic working papers) 477, Bank of Italy, Economic Research and International Relations Area.
  10. Blackorby, Charles & Donaldson, David, 1988. "Cash versus Kind, Self-selection, and Efficient Transfers," American Economic Review, American Economic Association, vol. 78(4), pages 691-700, September.
  11. Andrea Brandolini, 1999. "The Distribution of Personal Income in Post-War Italy: Source Description, Data Quality, and the Time Pattern of Income Inequality," Temi di discussione (Economic working papers) 350, Bank of Italy, Economic Research and International Relations Area.
  12. Sergio Beraldo, 2003. "Fornitura pubblica di beni privati e teoria della tassazione ottimale," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2003(79).
  13. Sutherland, H., 1995. "Static Microsimulation Models in Europe: A Survey," Cambridge Working Papers in Economics 9523, Faculty of Economics, University of Cambridge.
  14. Le Grand, Julian, 1982. "The Distribution of Public Expenditure on Education," Economica, London School of Economics and Political Science, vol. 49(193), pages 63-68, February.
  15. Massimo Baldini, 2001. "Inequality and Redistribution over the Life-Cycle in Italy: an Analysis with a Dynamic Cohort Microsimulation Model," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, vol. 4(2), December.
  16. Balestrino, Alessandro, 1999. " The Desirability of In-Kind Transfers in the Presence of Distortionary Taxes," Journal of Economic Surveys, Wiley Blackwell, vol. 13(4), pages 333-54, September.
  17. Besley, Timothy & Coate, Stephen, 1991. "Public Provision of Private Goods and the Redistribution of Income," American Economic Review, American Economic Association, vol. 81(4), pages 979-84, September.
  18. Robin W. Boadway & Maurice Marchand, 1990. "The Use of Public Expenditure for Distributive Purpose," Working Papers 796, Queen's University, Department of Economics.
  19. Margerita Borella, 2004. "The distributional impact of pension system reforms: an application to the Italian case," Fiscal Studies, Institute for Fiscal Studies, vol. 25(4), pages 415-437, December.
  20. Cremer, Helmuth & Gahvari, Firouz, 1997. "In-kind transfers, self-selection and optimal tax policy," European Economic Review, Elsevier, vol. 41(1), pages 97-114, January.
  21. A. B. Atkinson, 1999. "The Economic Consequences of Rolling Back the Welfare State," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011719, January.
  22. Atkinson, Anthony B., 1995. "The Welfare State and Economic Performance," National Tax Journal, National Tax Association, vol. 48(2), pages 171-98, June Cita.
  23. Bruce, Neil & Waldman, Michael, 1991. "Transfers in Kind: Why They Can Be Efficient and Nonpaternalistic," American Economic Review, American Economic Association, vol. 81(5), pages 1345-51, December.
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  27. repec:ebl:ecbull:v:8:y:2005:i:1:p:1-9 is not listed on IDEAS
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Citations

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Cited by:
  1. Fabio Padovano & Gilberto Turati, 2012. "Redistribution through a "Leaky Bucket". What explains the Leakages?," Economics Working Paper from Condorcet Center for political Economy at CREM-CNRS 2012-03-ccr, Condorcet Center for political Economy.
  2. Francesco Scervini, 2009. "Political Economy of Director's Law: How Sincere Voters Decide on Cash and In-kind Redistribution in a Costly Political Framework," Working papers 8, Former Department of Economics and Public Finance "G. Prato", University of Torino.

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