Italian welfare state
Encyclopedia
The Italian welfare state is based upon the corporatist-conservative model, as described by Gøsta Esping-Andersen
, one of the world's foremost sociologists
working on the analysis of welfare state
s.
s in the United Kingdom
. The SSN is a public and universalistic system aimed at guaranteed healthcare for all citizens. It was planned to be an entitlement and was not means-tested. Later, the financial situation urged to introduce user charge
s in order to avoid wastages, even if this might lead to inequalities, and means-testing for common tests and medicine. In 1992 a major reform allowed citizens to pay higher fees in order to receive private services within the SSN; by this way, public spending decreased. Today the SSN is financed both by direct taxes and by the revenues of the local health agencies, made by partial or total payments on services. The SSN is mainly dealt by regions
, which control the local health agencies and set the level of user charges, however under the control of the Health Ministry. Differences between regions in wealth levels, political coalitions in office and competence of the political elite brought to very different outcomes, as the “Red Belt
” of central-Italian communist
-led regions is thought to have the best, more comprehensive, cheap and universal healthcare system; the Northern demochristian
-led regions are thought to have quite good but expensive healthcare system, while the Southern regions are often charged with malasanità – bad healthcare.
In 1978 the Fair Rent Act (Equo Canone) introduced a maximum fee for residential properties and four-year contracts. Maximum fees were increased much slower than inflation
and didn’t comply with changes in the urban population. This led landlords to prefer selling to renting, or to opt for black-market negotiations of fees, which in turn led to a restriction in the rental market. In 1998, only 20% of the Italian housing market was rental; average- and high-income families preferred to buy their home, while low-income families that could not afford to, suffered from high rents. The 1998 Rent Act tried to revitalize rental contracts by liberalizing the fees and allowing rental conditions be set by landlords’ and tenants’ organizations.
based on contributions (indennità di disoccupazione). The requirements to obtain up to the 40% of the previous wages (for a maximum of around 1000 € in 2007) for up to seven months is to have been previously employed and enrolled for the insurance, depositing contribution for at least 52 weeks in two years. The extremely high unemployment
rates that Italy faced in the 1980s brought unemployment benefits to be the first item of increase in social security spending, and contributed to the rise of the Italian public debt.
Since 1947, and with reforms in 1975, cash benefits are provided as shock absorbers to those workers who are suspended or who work only for reduced time due to temporary difficulties of their factories. This institute, the Redundancy
Fund (Cassa integrazione guadagni), aims to help the factories in financial difficulties, by relieving them from the costs of unused workforce, supporting as well those workers that might lose part of their income. The workers receive the 80 % of their previous wages, under a maximum level established by the law, and their contributions for pension
s are taken for paid, even if they are not (contributi figurativi).
Along with the Redundancy Funds, since 1984 companies can apply also for Solidarity Contracts: after a negotiation with the local trade unions, the company can establish contracts with reduced work time, in order to avoid dismissing redundancy workers. The state will grant to those workers the 60% of the lost part of the wage. Such contracts can last up to four years, five in the South. Since 1993, the same Solidarity Contracts can be made also by companies not entitled to Redundancy Funds. In this case, the state and the company will grant each one the 25% of the lost part of wage to the workers, for up to two years.
If the Redundancy Fund does not allow the company to re-establish a good financial situation, the workers can be entitled to mobility allowances (Indennità di mobilità), if they have a continuing employment contract and they have been employed in the previous twelve months. Other companies are provided incentives for employing them. The period of unemployment allowance is generally up to 12 months. To remain entitled to allowances, the worker cannot refuse to attend at a formation course, or to take over a similar job with a wage over the 90% of the previous one, or to communicate to the Social Security Board to have found a temporary or a part time job.
s in Italy
dates back to the institution in 1898 of the Factory Workers National Insurance Fund for Invalidity and Ageing (CNAS), a voluntary insurance that received grants from the State as well as from employers. In 1919 it became compulsory and it affected 12 million workers; the Agency was renamed National Institute for Social Insurance (INPS) in 1933. In 1939 unemployment
insurance
, tuberculosis
benefits, widow pensions and family grants were established, along with the first forms of redundancy funds; pension ages were lowered. In 1952 pensions were reformed, and minimum pensions were introduced. In 1968-69 the contribution
-based system was changed with a retribution
-based system, related to previous wages. New measured were introduced for workers and employers to face production crisis. In the 1980s INPS got linked to the new healthcare system, and in 1989 it went through an administrative reform. Since the following year the private workers got their pension related to the company’s year-income. The financial disorders of the early 1990s brought to an increase of pension age in 1992 and the introduction of the voluntary private insurance schemes the following year. The reform, in order to decrease both fragmentation and public spending, was completed by the Dini Act in 1995 that introduced a flexible pension age between 57 and 65 years, and swung back to the contribution
system. Pension coverage for the new flexible workers was introduced in 1996. Finally, in 2004 the Maroni
Act tried to reform restrictively the pension system starting from 2008, but its effects are supposed to get deeply smoothed by the new centre-left government in charge since 2006.
In the middle of the first decade of the 21st Century, the Italian welfare state is still facing many challenges:
Gøsta Esping-Andersen
Gøsta Esping-Andersen is a Danish sociologist whose primary focus is on the welfare state and its place in capitalist economies. Esping-Andersen is a professor at Pompeu Fabra University in Barcelona , and member of the Scientific Committee of the Juan March Institute and of the Board of Trustees...
, one of the world's foremost sociologists
Sociology
Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...
working on the analysis of welfare state
Welfare state
A welfare state is a "concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those...
s.
Health care
In 1978, a health reform introduced the National Health Service (Servizio Sanitario Nazionale - SSN), a term inspired by the National Health ServiceNational Health Service
The National Health Service is the shared name of three of the four publicly funded healthcare systems in the United Kingdom. They provide a comprehensive range of health services, the vast majority of which are free at the point of use to residents of the United Kingdom...
s in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
. The SSN is a public and universalistic system aimed at guaranteed healthcare for all citizens. It was planned to be an entitlement and was not means-tested. Later, the financial situation urged to introduce user charge
User charge
A user charge is a charge for the use of a product or service. A user charge may apply per use of the good or service or for the use of the good or service...
s in order to avoid wastages, even if this might lead to inequalities, and means-testing for common tests and medicine. In 1992 a major reform allowed citizens to pay higher fees in order to receive private services within the SSN; by this way, public spending decreased. Today the SSN is financed both by direct taxes and by the revenues of the local health agencies, made by partial or total payments on services. The SSN is mainly dealt by regions
Regions of Italy
The regions of Italy are the first-level administrative divisions of the state, constituting its first NUTS administrative level. There are twenty regions, of which five are constitutionally given a broader amount of autonomy granted by special statutes....
, which control the local health agencies and set the level of user charges, however under the control of the Health Ministry. Differences between regions in wealth levels, political coalitions in office and competence of the political elite brought to very different outcomes, as the “Red Belt
Red belt
Red belt:* Red Belt Allegheny County road belt system* Red Belt Allegheny County road belt system* Red belt * Red belt * Redbelt...
” of central-Italian communist
Italian Communist Party
The Italian Communist Party was a communist political party in Italy.The PCI was founded as Communist Party of Italy on 21 January 1921 in Livorno, by seceding from the Italian Socialist Party . Amadeo Bordiga and Antonio Gramsci led the split. Outlawed during the Fascist regime, the party played...
-led regions is thought to have the best, more comprehensive, cheap and universal healthcare system; the Northern demochristian
Christian Democracy (Italy)
Christian Democracy was a Christian democratic party in Italy. It was founded in 1943 as the ideological successor of the historical Italian People's Party, which had the same symbol, a crossed shield ....
-led regions are thought to have quite good but expensive healthcare system, while the Southern regions are often charged with malasanità – bad healthcare.
Education and cultural resources
Education is free and compulsory for children between 6 and 16 years of age. It includes five years of universal primary school, three years of secondary school and finally four or five years of high school leading to a "diploma", which, in turn give access to professions, e.g. geometra, (draughtsman-surveyor) insegnante,(teacher) and university courses. Primary school includes free books but not unform or tranport, from the age of 12 the cost of books and transport, and all other fees for secondary school, are the responsibility of the family. Sometimes some families with low income,(means tested benefits) could apply for a voucher in part payment for the chosen workbooks/texts which are very numerous and expensive in Italy.[Universities] are both public and private; public universities are mainly financed by the State and have low, income-related fees and means-tested support for low-income students, while private universities have much higher fees.Housing
The problem of cheap and healthy housing for low-income people led to the passing of the 1903 Luzzati Act, which stipulated the setting up of public, non-profit, local Housing Agencies to build and rent apartments to meet the needs of an increasing urban population. Those agencies were reformed in 1938 but still deal with popular houses; the ranking to get a popular flat, and the fee, is means-tested and open to immigrants. In 1962, the Act n.167 encouraged the purchase, by local authorities, of land to be used for popular houses; even if this intervention mitigated the need for popular flats, it led however to the construction of dorm quarters without residential services, that were cut off from the rest of the towns that since 1978 had to be the object of requalification policies.In 1978 the Fair Rent Act (Equo Canone) introduced a maximum fee for residential properties and four-year contracts. Maximum fees were increased much slower than inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
and didn’t comply with changes in the urban population. This led landlords to prefer selling to renting, or to opt for black-market negotiations of fees, which in turn led to a restriction in the rental market. In 1998, only 20% of the Italian housing market was rental; average- and high-income families preferred to buy their home, while low-income families that could not afford to, suffered from high rents. The 1998 Rent Act tried to revitalize rental contracts by liberalizing the fees and allowing rental conditions be set by landlords’ and tenants’ organizations.
Unemployment
The problem of unemployment has been faced in Italy with governmental benefits, in the form of cash transfersCash transfers
Cash transfers are direct transfer payments of money to eligible people. Cash transfers are usually provided by the state and federal government.-Targeting:...
based on contributions (indennità di disoccupazione). The requirements to obtain up to the 40% of the previous wages (for a maximum of around 1000 € in 2007) for up to seven months is to have been previously employed and enrolled for the insurance, depositing contribution for at least 52 weeks in two years. The extremely high unemployment
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
rates that Italy faced in the 1980s brought unemployment benefits to be the first item of increase in social security spending, and contributed to the rise of the Italian public debt.
Since 1947, and with reforms in 1975, cash benefits are provided as shock absorbers to those workers who are suspended or who work only for reduced time due to temporary difficulties of their factories. This institute, the Redundancy
Layoff
Layoff , also called redundancy in the UK, is the temporary suspension or permanent termination of employment of an employee or a group of employees for business reasons, such as when certain positions are no longer necessary or when a business slow-down occurs...
Fund (Cassa integrazione guadagni), aims to help the factories in financial difficulties, by relieving them from the costs of unused workforce, supporting as well those workers that might lose part of their income. The workers receive the 80 % of their previous wages, under a maximum level established by the law, and their contributions for pension
Pension
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.The terms retirement...
s are taken for paid, even if they are not (contributi figurativi).
Along with the Redundancy Funds, since 1984 companies can apply also for Solidarity Contracts: after a negotiation with the local trade unions, the company can establish contracts with reduced work time, in order to avoid dismissing redundancy workers. The state will grant to those workers the 60% of the lost part of the wage. Such contracts can last up to four years, five in the South. Since 1993, the same Solidarity Contracts can be made also by companies not entitled to Redundancy Funds. In this case, the state and the company will grant each one the 25% of the lost part of wage to the workers, for up to two years.
If the Redundancy Fund does not allow the company to re-establish a good financial situation, the workers can be entitled to mobility allowances (Indennità di mobilità), if they have a continuing employment contract and they have been employed in the previous twelve months. Other companies are provided incentives for employing them. The period of unemployment allowance is generally up to 12 months. To remain entitled to allowances, the worker cannot refuse to attend at a formation course, or to take over a similar job with a wage over the 90% of the previous one, or to communicate to the Social Security Board to have found a temporary or a part time job.
Pensions
The history of pensionPension
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.The terms retirement...
s in Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
dates back to the institution in 1898 of the Factory Workers National Insurance Fund for Invalidity and Ageing (CNAS), a voluntary insurance that received grants from the State as well as from employers. In 1919 it became compulsory and it affected 12 million workers; the Agency was renamed National Institute for Social Insurance (INPS) in 1933. In 1939 unemployment
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
, tuberculosis
Tuberculosis
Tuberculosis, MTB, or TB is a common, and in many cases lethal, infectious disease caused by various strains of mycobacteria, usually Mycobacterium tuberculosis. Tuberculosis usually attacks the lungs but can also affect other parts of the body...
benefits, widow pensions and family grants were established, along with the first forms of redundancy funds; pension ages were lowered. In 1952 pensions were reformed, and minimum pensions were introduced. In 1968-69 the contribution
Contribution
Contribute may refer to:*Adobe Contribute Web editing softwareContribution may refer to:*Donation*Sharing*Payment*Contribution : a payment between defendants with joint and several liability to apportion liability....
-based system was changed with a retribution
Retributive justice
Retributive justice is a theory of justice that considers that punishment, if proportionate, is a morally acceptable response to crime, with an eye to the satisfaction and psychological benefits it can bestow to the aggrieved party, its intimates and society....
-based system, related to previous wages. New measured were introduced for workers and employers to face production crisis. In the 1980s INPS got linked to the new healthcare system, and in 1989 it went through an administrative reform. Since the following year the private workers got their pension related to the company’s year-income. The financial disorders of the early 1990s brought to an increase of pension age in 1992 and the introduction of the voluntary private insurance schemes the following year. The reform, in order to decrease both fragmentation and public spending, was completed by the Dini Act in 1995 that introduced a flexible pension age between 57 and 65 years, and swung back to the contribution
Contribution
Contribute may refer to:*Adobe Contribute Web editing softwareContribution may refer to:*Donation*Sharing*Payment*Contribution : a payment between defendants with joint and several liability to apportion liability....
system. Pension coverage for the new flexible workers was introduced in 1996. Finally, in 2004 the Maroni
Roberto Maroni
Roberto Maroni is an Italian politician from Varese. He is a member of the Northern League political movement. Since 1992 he is a Member of the Chamber of Duputies of the Italian Republic, always elected in Lombardy's districts and costituencies...
Act tried to reform restrictively the pension system starting from 2008, but its effects are supposed to get deeply smoothed by the new centre-left government in charge since 2006.
Family policies, elderly and disabled care, social assistance
Maternity leave consists of two months before and three months after birth. Mothers are granted 80% of their previous wages and an additional six months of optional leave. They have the right not to lose their job for one year. Family benefits are related to family size and income, and increase with the presence of disabled in the family. Social assistance is entitlement based and means tested, and applies to needy families. Social services to the elderly, the invalid, and needy families are dealt with by local authorities, that can benefit from the work of volunteer associations and no-profit social service cooperatives.Historical Overview
The Italian welfare state's foundations were laid along the lines of the corporatist-conservative model, or of its Mediterranean variant. Later, in the 1960s and 1970s, increases in public spending and a major focus on universality brought it on the same path as social-democratic systems. These policies proved to be financially unsustainable, as public debt and inflation grew alarmingly, not allowing the welfare state to develop completely. In the 1990s, efforts moving towards decentralization and privatization were used in an attempt to cope with European pressures for economic stability, which were finally reached by 2001.In the middle of the first decade of the 21st Century, the Italian welfare state is still facing many challenges:
- regional disparities, mainly between North and South, that negatively affects the social equality of all citizens, and promotes “social tourism” in order to benefit from more developed regions’ welfares;
- the aging of the population, which is presenting challenges to the economic sustainability of the pay-as-you-go pensionPensionIn general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.The terms retirement...
system, even with a contribution-based scheme; - the extremely low fertility rates, whose downward trend seems not to be affected by una tantum policies, like the 1000 € cash benefit per child introduced in the 2005-2006 period.
- the low level of women participation in the labour market. Women usually enter the labour market after their studies, (which tend to be more fruitful than men’s studies, though it should be at least noted that they also generally go into different areas of study), the women suffer from statistically lower wages, higher unemployment and expulsion (forced or voluntary,) from the labour market at least partially due to maternity.
- immigrationImmigrationImmigration is the act of foreigners passing or coming into a country for the purpose of permanent residence...
-related problems. Italy has a lower rate of immigration population than the European average, and these immigrants are primarily first-generation immigrants who tend to fall outside of the social security system, even when they are not illegal immigrants. Also, immigration raises opposite, (disputed) concerns in the native population about the use of social services by the immigrants, (like social or subsidized housing), possibly preventing Italian natives from benefiting from these services.
Further reading
- Arts, Wil and John Gelissen, (2002) “Three worlds of welfare capitalism or more? A state-of-the-art report”, Journal of European Social Policy, vol. 12, London: Sage
- Denti, Davide (2007), The Unemployment Insurance System in Sweden and in Italy, Södertörns Högskola, unpublished
External links
- Inps, La nostra storia
- Tafter, La frammentazione delle politiche di edilizia sociale
- Tesionline, Tesi di laurea - La contrattazione assistita nella nuova disciplina delle locazioni abitative
- Tesionline, L’Equo Canone
- Wingert, Jamie (2000), Country Case Studies and Links: Italy, Johnstown: Pittsburgh University