Winners and Losers in the Italian Welfare State: A Microsimulation Analysis of Income Redistribution Considering In-Kind Transfers

In this paper we consider income distribution in Italy, and evaluate the redistributive impact of in-kind transfers by using SHIW data provided by the Bank of Italy. The analysis is conducted at the household level, comparing families with different needs by means of equivalence scales. We consider both cash and noncash income transfers, looking in particular at health services and educational services. Our results show that – in a given year – redistribution in Italy (as in other industrialised countries) is operated mainly through cash transfers, while the redistributive power of in-kind transfers appears to be limited, and their impact on income distribution less than that obtained with direct taxation. Recent pensions reforms will probably reduce cash transfers, and call for new ways of redistributing income.