Few low-income families benefit from Universal Basic Income

The Evaluation of the Basic Income in Italy

The Basic Income was supposed to help families in absolute poverty during the pandemic, but it fell short of expectations and only improved the economic conditions of up to 20% of struggling households.
Now replaced by the Inclusion Allowance, it’s time to assess the Basic Income, a subsidy that was received by around 2.4 million families in Italy between 2019 and 2023.
This measure, aimed at combating poverty and facilitating entry into the workforce, was strongly advocated by the Five Star Movement and has been one of the most divisive political topics in recent years, often marred by controversies regarding individuals receiving it illicitly.

According to the latest report from the Ministry of Labor and Social Policies, the Basic Income has cost the State over 34 billion euros and was particularly in demand in 2020 and 2021.
During the harshest years of the economic crisis resulting from the health situation, the measure reached its peak effectiveness, helping around 450 thousand families lift themselves out of absolute poverty, albeit out of a total of over two million struggling households.
Judging by the numbers in the report, the Basic Income appears to have missed a significant portion of the people it was intended to assist.

On one side, there is the Istat, which defines the absolute poverty threshold based on actual consumption expenditure.
On the other side, there were eligibility requirements for accessing the subsidy, which excluded, for instance, non-EU families residing in Italy for less than ten years or those who did not fall under the specified Isee bracket, which, as noted, being nationally set, did not consider the “highly differentiated costs of living at the territorial level.”

As a result, in 2021, the year of its highest diffusion, only 38% of families considered in absolute poverty by Istat, i.e., the target demographic, benefited from the Basic Income.
In 2022, the proportion of impoverished families receiving the subsidy decreased to 32.3%.
As stated in the report, there was a “significant non-participation of families and individuals.” While many could have benefited from the measure to improve their economic conditions, there were also those who accessed the Basic Income despite not being in the poverty conditions as defined by Istat.

Participation in the Basic Income was higher than average in the Southern and Insular regions, among single-person or adult-only households, among Italian-only families living in rented accommodation.
It was lower than necessary among families in the Northern regions, individuals over 64 living alone, families with two or more children, and foreign-born households.
According to estimates, over 40% of recipients were not in a state of poverty.
The report suggests there might have been an inclination to “split the family unit and use fake addresses opportunistically to access benefits.”

However, something else didn’t work.
The lack of involvement of a significant portion of individuals in absolute poverty in the subsidy could be due to personal reasons (e.g., savings availability) or a lack of information about the measure.
Conversely, the high participation of households not meeting the Istat poverty criteria could be explained by the type of job performed by individuals who were employed at the time of application, in professional fields with irregular employment rates up to three times higher than the average.

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