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The Contribution of the Tax and Transfers System to Poverty in Italy

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  3. Applied Economics Quarterly
  4. Vol. 68, Issue 4
  5. pp. 231–255

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Astarita, C., Purificato, F., Talamo, G. The Contribution of the Tax and Transfers System to Poverty in Italy. Applied Economics Quarterly, 68(4), 231-255. https://doi.org/10.3790/aeq.2022.1445801
Astarita, Caterina; Purificato, Francesco and Talamo, Giuseppina Chiara "The Contribution of the Tax and Transfers System to Poverty in Italy" Applied Economics Quarterly 68.4, 2022, 231-255. https://doi.org/10.3790/aeq.2022.1445801
Astarita, Caterina/Purificato, Francesco/Talamo, Giuseppina Chiara (2022): The Contribution of the Tax and Transfers System to Poverty in Italy, in: Applied Economics Quarterly, vol. 68, iss. 4, 231-255, [online] https://doi.org/10.3790/aeq.2022.1445801
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The Contribution of the Tax and Transfers System to Poverty in Italy

Astarita, Caterina | Purificato, Francesco | Talamo, Giuseppina Chiara

Applied Economics Quarterly, Vol. 68 (2022), Iss. 4 : pp. 231–255

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Article Details

Publisher Name
Duncker & Humblot
DOI
https://doi.org/10.3790/aeq.2022.1445801
Language
German
Pages
25
Keywords

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Author Details

Corresponding author. CEPS – Centre for European Policy Studies, Place du Congres, 1, 1000, Bruxelles, Belgium.

University of Naples “Federico II”, Department of Law, Via Porta di Massa, 32, 80133, Naples, Italy.

University of Palermo, Department of Economics, Business and Statistics, Via delle Scienze. ed.13. 90128, Palermo, Italy.

References

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Abstract

This paper examines how the Italian tax and transfer system affected income poverty from 2006 to 2018. By using cross-sectional survey data from the Italian EU-SILC (European Union Statistics on Income and Living Conditions) and developing some ad hoc synthetic indices, the research is methodologically based on comparing the actual and a hypothetical situation. In the former, identified as “full government involvement,” the tax and transfer system affects the amount of equivalized disposable income; in contrast, in the latter, identified as “limited government involvement,” the equivalized disposable income corresponds to market income. Evidence was found of the ineffectiveness of the tax and transfer system. The negative impact, as compared to the non-involvement situation, is quantified as follows: for every person who benefitted from it and became non-poor, at least one or more people were negatively affected and became poor. As a result, the overall population of the poor in the actual situation has always been larger than that in the hypothetical scenario; nevertheless, despite the fiscal consolidation implemented by the Italian government, this distortion has gradually narrowed over time. Finally, according to the poverty indicators from the Foster, Greer, and Thorbecke class, the tax and transfer system also modified the income distribution of poor persons by raising the average and lowering the variance of their disposable income. This beneficial impact has become stronger in recent years.

Table of Contents

Section Title Page Action Price
Caterina Astarita / Francesco Purificato / Giuseppina Chiara Talamo: The Contribution of the Tax and Transfers System to Poverty in Italy 231
Abstract 231
1. Introduction 231
2. Literature Review 232
3. Data and Methodology 235
4. Empirical Results 240
5. Discussion 245
References 250
Appendix 1: Methodology 252

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