Social policies and income redistribution across Italian regions: the role of different tiers of government

This paper presents an analysis of income redistribution among the regions of Italy as a result of social policies implemented during the decade from 1996 to 2005. Methodologically, the paper builds on a recent strand of literature that has focused on estimating the redistributive effects of public intervention, and which also includes some analyses of Italy. On this basis, this work develops an approach for estimating the redistributive effects of a specific area of public intervention, in this case social policy. The paper is organised as follows: first, an adequate data set is built from existing data, which are then used to estimate total redistribution resulting from social policies. In addition, the total redistribution effected by the Italian public administration is broken down to show the contribution of each tier of government (central government, regional governments, local governments and social security institutions). Results from the estimates show that social policies have a significant redistributive impact, in particular when compared to total redistribution stemming from public policies. This redistributive effect is primarily due to programmes implemented by social security institutions and central government. Regional and local government policies contribute only marginally to total redistribution. Finally, a further analysis investigates the qualitative features of social policies that explain the estimated redistribution.