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Italy’s recessions have hurt some more than others, ISTAT 2017 report shows

by Davide Colombo

The Italy that has left behind the recessions that came and went between 2008 and 2014 is poorer, with more income inequality and with above-average unemployment rates compared to other EU countries.

This is the picture that emerges from ISTAT’s 2017 Annual Report presented yesterday by the statistics bureau’s president Giorgio Alleva, a massive document that has updated its approach to social categories by fleshing them out with education levels, family size, citizenship and other factors.

Italy’s 25.7 million families have therefore been placed into nine groups with evocative names: the “young blue-collar” and the “silver retired,” the “provincial traditional families” or “the solitary elderly and the unemployed youth,” right up to the “managerial class.”

The 4.5 million Italians (1.8 million households) located in the lucky top group have an income of 70% above the national average, while the “low-income families with foreigners” (also 1.8 million households) earn 40% less than the average. The “low-income Italian families” (1.9 million families totalling 8.2 million individuals) do a bit better, earning 30% less than the national average.

The new “classification tree” is based on a large division: on the one hand, families whose “chief breadwinner” is inactive, unemployed or has low pay (just over 10 million , 40% of the total); on the other, the 15 million households with a breadwinner who is a salaried employee or a professional, or else retired.

“The social groups identified in our analysis have a structural character, and tend to perpetuate over time,” said Alleva.

After the statistical narratives of previous years based on generations (2015) and territories (2016), ISTAT decided to do a new analysis exploiting its wealth of data.

This reclassification for social groups offers a “re-reading” of the latest trends: from the labor market to living conditions, demographics and disparities in income.

The country is aging, underlined Alleva, with over 65-year-olds now 22% of the population, a European record. And it is no longer growing.

In 2015, births hit an all time low of 474,000, “a record even since the mid-sixteenth century, when Italy had only one fifth of today's population,” Alleva recalled quoting Massimo Livi Bacci.

The labor market, however, is improving, growing more than GDP: between 2015 and 2016 the employment rate reached 57.2% (+ 0.9%); better but far from 66.6% of the EU average, “largely because of the gap in female employment rates,” observed Alleva, pointing out that growth is across all age groups but is strongest for the over-50s.

What policy conclusions does the survey lead to? 

Since the double recession affected families differently (more for those with low incomes and with foreigners, less those with a retired person as the main breadwinner), the first thing to point out is that it is difficult to reach the weaker social groups with income redistribution and services, because “the effect of social contributions and tax measures affects the social groups who are in the labor market.”

The overall redistributive effect, also because of the high tax wedge companies pay on labor costs, is therefore “minimal” for the 3.59 million families without an income (13.9% of the total) where there is no breadwinner who is employed or retired.

The other policy conclusion is the growing importance of investment in the so-called knowledge economy. Correcting the redistributive mechanisms is no longer enough, concluded Alleva: “Government action has many opportunities to remove barriers to equal opportunity, starting from education and training of human capital.”


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