No. 697 - Social shock absorbers in Italy: a comparison with the main European countries

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by Francesca Carta, Antonio Dalla Zuanna, Salvatore Lattanzio and Salvatore Lo BelloJune 2022

This paper analyses the Italian system of social shock absorbers (unemployment benefit and short-time work schemes) and Active Labour Market Policies (ALMPs), in comparison with those implemented in the main euro-area economies. The analysis also includes guaranteed minimum income schemes that can act as last resort incomes when social shock absorbers are not accessible or sufficient for a household's basic needs.

The overall structure of the Italian social insurance system is fairly similar to that implemented in the main European countries. However, it is characterized by: a) lower importance being given to the ALMPs and poor coordination with the unemployment benefit and the new minimum income scheme; b) the eligibility for short-time work schemes to closing firms as well; and c) higher risk of labour supply disincentives and inequalities towards foreigners and large households (inherent in the design of the new minimum income scheme).