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Social Security Systems and the Distribution of Income: an Application to the Italian Case

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  • Margherita Borella

    () (Center for research on Pensions and Welfare Policies, Turin)

Abstract

This paper analyses the distribution of pensioners’ income under different Social Security systems. The work focuses in particular on the recent reforms undertaken in the Italian Social Security system. Simulations, calibrated on Italian male dependent workers earnings histories, show that the new contribution-based scheme (after the reform in 1995) reduces inequality among all groups considered, i.e. private or public dependent workers of different education groups. The generalised Lorenz curve shows that for the overall population considered (one generation of retiring dependent workers) the (small) reduction in average benefit is compensated by the reduction in inequality, with the exception of the highest percentiles. However, within groups with a steeper age-earnings profile (high school and college graduates employed in the private sector) the generalised Lorenz curve associated with the contribution-based scheme is dominated by the distribution associated with the previous earnings-related scheme.

Suggested Citation

  • Margherita Borella, 2001. "Social Security Systems and the Distribution of Income: an Application to the Italian Case," CeRP Working Papers 08, Center for Research on Pensions and Welfare Policies, Turin (Italy).
  • Handle: RePEc:crp:wpaper:08
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    Cited by:

    1. Raquel Fonseca & Thepthida Sopraseuth, 2005. "Welfare Effects of Social Security Reforms Across Europe : the Case of France and Italy," CSEF Working Papers 138, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.

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    Keywords

    Social security; income distribution;

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