1. A Developed Welfare State in an Unqual Society
Italy as a Case Study
Bolzonaro Fabio
Department of Sociology
University of Cambridge

2. It is commonly assumed that social expenditures have equalizing effects on income distribution
We will aspect that those contries having generous welfare states are also those more economically equal
Is this conclusion always confirmed?

3. Fig.1 Income inequality on a sample of OECD countries in 2007
Source: Eocd

4. Tab. 1 Total social expenditure in some OECD countries (percentage of GDP)
Year
1980
1985
1990
1995
2000
2005
Country
Sweden
27.1
29.4
30.2
32.1
28.5
France
20.8
26.0
25.1
28.6
27.9
29.2
Denmark
24.8
23.2
28.9
25.8
Germany
22.6
22.2
26.5
26.2
26.8
Finland
18.0
22.5
24.1
30.9
24.3
26.1
Italy
20.9
20.0
19.9
25.0
Norway
16.9
17.8
22.3
21.3
21.6
United Kingdom
16.7
17.0
20.2
19.2
Spain
15.6
21.4
20.3
21.2
OECD – Total
16.0
18.1
19.6
20.6
Greece
10.2
16.5
17.3
Slovak Republic
----
18.6
17.9
16.6
Canada
13.7
18.9
United States
13.1
13.4
15.3
14.5
15.9
Mexico
1.9
3.6
4.7
5.8
7.4
Portugal
10.4
13.0

5. There seems to be a fairly consistent correspondence between generous welfare states and low levels of income inequality
Ex: Sweden and Denemark are the two most economically equal societies and, at the same time, they have two of the most developed systems of social protection
Conversely limited welfare regimes are typical of the more unequal societies (Mexico, US etc)
However Mediterranean countries and in particular Italy partially contradict this general conclusion:
from 1980 to 2005 the Italian total social expenditure increased of 7% of its GDP reaching the level of 25%
at the same time, from the biginning of 1980s income inequality in Italy steadly increased registering between 1986 and 1989 rates not dissimilar to those of the US and the UK

6. Are Welfare States Always Redistributive?
‘We should question any straightforward link between higher levels of social spending and more income redistribution’ (Esping-Andersen, 2009, 644)
The common assumption that the welfare state has always redistributive impacts derives from a misunderstanding of what a wefare state is
Any system of social protection has at least two purposes:
it spreads risks and benefits along the life-cycle;
it spreads risks and benefits between different social groups
The second dimension has a very limited redistributive impact and it generally absorbs the largest portion of the social expenditure in the majority of contemporary welfare regimes

7. ‘A welfare state is an answer to basic and long-term developmental processes and the problems created by them…it is a general phenomenon of modernisation on the one hand and of processes of social and political mobilisation on the other’ (Flora, 1981, 8). The competitive political dimension is an essential perspective to understand the role and fuctions of any system of social protection Welfare states are instruments of social stratification Esping-Andersen (1990) cosiders the Italian welfare state as a typical conservative regime. As such its main characterestics are:
preservation of status differntials;
strong role of the family;
preservation of gender discrimination

8. A Very Unbalanced Welfare State
Although some incisive reforms in the 1990s the Italian welfare states still presents its traditional features
According to Ferrera ( 2007) it is possible to individuate by two main distorsions:
an unbalanced distribution between different risks (funtional distrosion);
an unbalanced distribution of benefits between different social categories (distributive distorsion)
These two anomalies can be recognised by comparing the Italian distribution of social expenditure by function with the average spending of other European countries

9. Source: Eurostat ec.europa.eu/eurostat
Fig Social Expenditure by function in Italy in 2006
(percentage values on total social expenditure)
Source: Eurostat ec.europa.eu/eurostat

10. In 2006 Italy spent around 60% of its total budget in old age and survivors pension in contrast with an European average of 46%
What is more impressive is the limited funding destinated to other periods of the life-cycle or voices having a potentially stronger redistributive impact
Family policies are quite under-represented although their crucial role in overcoming different forms of social inequality and the high incidence of child poverty in Italy. The largest part of social services are administrated at local level. As a consequence there are great disparities among different geographical areas

11. Tab. 2 Poverty rates in 2007 in some OECD countries
______________________________________________________________________________________
Country All Children Children in Two Parent Below 60% of population median Families
United States
United Kingdom (1999)
Greece
Spain
Italy
France
Germany
Denmark
Sweden
________________________________________________________________________________________________________
Source: Luxembourg Income Study (LIS)

12. Reforms with inequalities A closer consideration of the Italian pension reforms
Italian pension have traditionally been very generous
A political bargain between different forces aimed at preserving their national and local costituencies and clienteles lies behind the over-exmpansion of the pension system
If it is generally true that the redistributive impact of old age pensions is quite limited, to a certain extent the Italian context is an execption with this regard. Becasue of the limited economic support offered by public institution to younger generations, old age pensions have become the main source of an informal channel of income redistribution within the same family

13. Putting into question the equality of Italian the pension system means considering the equality of an important, although informal, part of whole the Italian system of social protection
The first half of the 1990s has seen the approval of two major pension reforms aimed at:
introducing more uniformity and equality
garanting the long-term financial sustainability of the system
Have these reforms promoted more equality?

14. The Traditional Features of the Italian Pension System untile the Beginning of the 1990s
Until the reforms of the 1990s the Italian pension system still presented its traditional features:
It was organized along occupational lines;
it was administrated by many different institutions having their own rules in terms of contribution and benefits;
it was an highly fragmented system with evident privileges especially in favour of public workers

15. Amato Reform 1992 Dini Reform 1995
Introduced by the Prime Minister Amato, it had two important results:
it harmonized the pension regime between private and public workers
it changed the reference period on the basis of which to calculate the future amount of the pension. The new regime will be only applied to new entrants in the labour market
Dini Reform 1995
after the defeat of the first Berlusconi government which tired to introduce a more incisive pension reform, the new appointed Prime Minister, after a strenuous bargain with labour unions reached an agreement for a new reform. Two important aspects affecting the equality of the whole system should be underlined:
the passage to a contributory related mechanism to calculate the future pension
the new method of calculus will particularly affected workers, especially women and young people, having precarious and low paid jobs during their professional career (Ferrera, 2007)
the reform will start to be implemented only in 2013 and it will be fully operative in 2035

16. A Sort of Conclusion
Some points I would like to remark after this brief analysis of the Italian welfare state:
devoting the largest part of social expenditure to old age pensions and a very limited part to other voices implies a clear inter-generational inequality;
Italian families are asked to assumed excessive responsabilities to garantee a sort of safety net. This is especially true for low and medium income families;
Demographic changes will put into question the future sustanability of the Italian system of social protection