A Minimum Income in Italy Letizia Ravagli Istituto Regionale Programmazione Economica della Toscana ISER 28 February 2014 InGRID Winter School: Using EUROMOD for cross country microsimumation General Information: about the project Project approved for a transnational visiting to ISER by the InGRID selection panel in September 2013 General Information: my home institution IRPET: Regional Institute for Economic Planning of Tuscany (Italy) Models: Macroeconomics models: Input Output, SAM, DANTE Dynamic microsimulation model: Irpetdin Static microsimulation model for firms: Marte Tax-benefit microsimulation model: MicroReg General Information: MicroReg in brief MicroReg: is a static microsimulation model constructed by IRPET for the Tuscan Region policy maker Database: IT-SILC Main feature: multi-regional, covers all italian regions Direct taxes (PIT, additional regional PIT), indirect taxes (VAT) and property taxes (ICI, IMU) In cash (e.g., family allowances) and in kind benefits (e.g., health and education) Project description: context People at risk of poverty or social exclusion (%) Europe 2020 Srategy Indicator 40 35 30 25 20 15 10 5 After/before crisis Var. (2012-2007) Level after crisis (2012) Netherlands Sweden Finland Luxemb. Austria Denmark Germany Belgium United Kingdom Portugal Spain Italy Greece -5 France r 0 Project description: context Minimum Income (MI) is a way to tackle poverty. Since 1992 the European Commission, with the Council Recommendation 92/441/EEC, called for the introduction in all Member States of a guaranteed MI. In 2010, as part of the Europe 2020 Strategy, a resolution of the European Parliament emphasized the role of MI in fighting poverty and promoting an inclusive society. Almost all the EU countries adopted a MI scheme with different rules and approaches. Italy still lacks a universal form of protection against poverty and social exclusion. Project description: objectives in brief I. To study european experiences of MI in order to identify the best ones; II. to design a MI for Italy and to estimate its costs and benefits. Project description: objectives in details Comparing MI in European countries in terms of coverage (comprehensive?, categorical?, means-testing?) and adequacy (in reducing poverty and poverty intensity). Analyzing the limits of current Italian measures against poverty (supplementary pension, social pension, social card, some regional MI). Designing a proposal for a MI in Italy by evaluating different scenarios. Identifying possible funding schemes for a MI in Italy (e.g., raising taxes, redistributing existing instruments). Analyzing the distributional effects of a MI in Italy (winners and losers, impact on reducing poverty and inequality). Project description: methods EUROMOD will be used to: simulate MI in european countries simulate italian current instruments against poverty simulate a MI in Italy simulate a funding scheme Analysis of simulation results with a statistical software (e.g. Stata) Project description: some references Figari F., Haux T., Matsaganis M., Sutherland H. (2010), Coverage and adequacy of minimum income schemes in the European Union, EUROMOD Working Paper No. EM8/10. Marchal S., Marx I., Van Mechelen N. (2011), Do Europe’s Minimum Income Schemes Provide Adequate Shelter against the Economic Crisis and How, If at All, Have Governments Responded?, IZA DP No. 6264. Baldini M. , Bosi P. , Ciani E., Colombini S. , Mesini D., Ranci Ortigosa E., Sala M. (2013), Il RMI: articolazione, beneficiari e sostenibilità finanziaria, Speciale: Nella crisi, oltre la crisi Costruiamo il welfare di domani Proposta per una riforma delle politiche e degli interventi socio-assistenziali attuale e attuabile, Prospettive sociali e sanitarie, n. 8-10/2013. Monti P. e Pellizzari M. (2010), Implementing a guaranteed minimum income in Italy: An empirical analysis of costs and political feasibility, Giornale degli Economisti. - GDE (Giornale degli Economisti e Annali di Economia), Bocconi University. - Vol. 69.2010, 1, p. 67-100.