Poverty Among the Elderly: An Assessment of the Italian Social Policies

This paper examines the Italian social policy instruments to contrast poverty among the elderly, focussing on the so-called social pension. Firstly, it analyses the institutional characteristics of the social pension, assessing its explicit and implicit design according to poverty indicators that are consistent with the official standards by the Italian Poverty Commission. The main conclusions are that the social pension acts as a limit to the poverty intensity rather than as a limit to the poverty incidence, and that in case of beneficiaries with a dependent spouse the pension includes an extra benefit that ensures the couple is receiving a minimum income above the poverty line. Secondly, the paper examines the ex-post performance of the social pension, by using data from the Bank of Italy Survey of Households Income and Wealth (BISHIW). In this analysis we take into consideration also individuals' and household's characteristics that are ignored by the law requisites for the access. Data point to some inefficiency in the selectivity of the system and to some ineffectiveness in contrasting poverty. For a social pensioner's household the econometric analysis shows that the probability of falling into poverty is higher, but only during economic downturns; that poverty on average is more widespread, although less intense; that poverty has more a cyclical than a persistent nature. Furthermore, there is evidence of a relevant role played by the interactions among household's and individuals' characteristics in determining the degree of exposure to poverty risks. An appropriate consideration of these aspects in the design of the tools directed at contrasting poverty seems vital in order to improve the effectiveness and the efficiency of the policy action.