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Narrowing the gap: the middle class and the modernization of welfare in Italy

  • Senior Consultant at research institutes


Purpose The purpose of this paper is to offer a contribution to our understanding of the changing relations of the middle classes with the Italian welfare state. The paper argues that the new interplay between public and private welfare is based on a very simplified analysis of Italian society. Design/methodology/approach The paper aims to integrate a variety of different theoretical approaches. The paper makes extensive use of the EU-SILC database, as well as the recently updated historic series of consumer studies undertaken by the Italian National Institute of Statistics. The data used in the paper were also drawn from the biennial cross-sectional Survey on Household Income and Wealth carried out by the Bank of Italy. Findings The analysis suggests that the problems of Italian society include not only a high incidence of poverty, but also increasing financial constraints for households placed between the established middle class and people in conditions of persistent poverty. The current public-private mix in service delivery appears less and less capable of protecting this social stratum against the growing risk of instability across all life domains, let alone of creating opportunities and fostering social mobility. Originality/value The paper explores some ways in which current politics of welfare have been designed with the view of fundamentally changing the welfare regime. It highlights how the public and private welfare mix has been purposefully organized in order to introduce a new model of social protection that aims to overcome certain specific characteristics of Southern European welfare states. It examines the sustainability of this model compared to the real living conditions of the Italian middle classes.
International Journal of Sociology and Social Policy
38(1-2), pp. 116-129
Narrowing the gap: the middle class and the
modernization of welfare in Italy
In the last decades, welfare reforms, budgetary measures and private
initiatives in Italy have been mainly driven by economic considerations aimed
towards increasing the sustainability of welfare and promoting a
modernization of existing institutional arrangements in order to deal with the
old and new risks of post-industrial society (Häusermann, 2010; European
Commission 2015; Palier 2010). Many of the institutional and structural
reforms undertaken by the welfare systems of other European countries were
also adopted by the Italian welfare system: funded schemes for pensions, new
forms of dualization and the enhancement of the role of private actors that
have historically played a secondary role in health care.
The paper argues that in these reforms the pressure for retrenchment and
spending cut initiatives is stronger than the pressure for welfare state
expansion that meets current social risks. The impact on the middle class,
mainly in terms of financial constraints, loss of economic security and
economic opportunities and the risk of exposure to short-term and occasional
poverty, is high and underestimated by policymakers and the majority of
social and political actors. The growing disparity between the living
conditions of the groups constituting the middle class and the capacity of
public and private welfare to provide them with support or improve their social
and economic conditions has been the focus of my analysis.
The argument of this paper is structured as follows. In the first part, I analyze
the changes undergone by the existing welfare system in Italy and the
emergence of a rebalancing of the relationship between public and
complementary welfare and new forms of dualization. In the second part, I
argue that these changes are gradually becoming a structural feature of Italian
welfare policy, one that risks increasing the hardship and instability
experienced by the majority of the population. The paper concludes with some
remarks on Italian social policy and on the necessity of promoting policies
which are not subordinate to the prevailing logics of economic growth.
Previous research and theory
In this paper, I seek to unpack and interpret key dimensions of the current
welfare changes within the broader debate on welfare state retrenchment and
welfare state resilience. The theoretical framework used includes works by
Hacker (2004; Hacker and Pierson, 2010; Hacker et al., 2013) and Starke
(2006). With regards to Italy, there exists an ample body of research into the
politics of retrenchment of welfare and spending cuts in social expenditure
(Ascoli, 2015; Colozzi et al., 2012; Pavolini et al., 2015). In my paper, I aim
to explore two as-yet under-theorized aspects: the manner in which these
changes worsen opportunities for the middle class to access both public and
supplementary welfare, and the degree to which these changes have been
organized with the aim of introducing a new model of social protection. This
new model is increasingly characterized by processes of de-universalization
and new forms of dualization in terms of access to benefits, efficiency and
quality of services, understood as a ‘differentiation of right, entitlement and
services provided to different categories of recipient’ (Emmenegger et al.,
2012, p. 10).
This article points out that these social policies are underpinned by a reductive
representation of the living conditions of a large part of the population. In
Italy, as in many other countries, a large body of theoretical and empirical
research has documented the effects of the unequal distribution of wealth and
income, the loss of security, opportunity and upward mobility (Lind, 2004;
Hacker 2010; Pressman 2007; Grusky 2014; Savage et al., 2015; Atkinson
and Brandolini 2011; Bagnasco, 2016; 2008), and the declining living
standards of middle class households (Parker et al., 2013; Negri et al., 2010).
All this is happening in the context of an economic landscape that has seen a
dramatic increase in income disparity (Stiglitz, 2015; Piketty, 2014; Atkinson,
2015; Franzini et al, 2014) and austerity measures that compound economic
marginalization and state abandonment (Pech, 2010). Moreover, some authors
have proposed new areas of analysis that monitor trends in the shape and form
of inequality and how these levels of inequality are remaking social
stratification (Grusky et al., 2014), and leading to the review of the centrality
of the divide between the middle and working class (Savage et al., 2015;
In an alternative approach, Sassen notes (2014, p.7; 2015; 2007) that the usual
tools to interpret today’s range of transformations of many societies - rising
inequality, rising poverty, rising government and households debts do not
help us to detect ‘conceptually subterranean trends’ nor to capture the larger
reality we must face. In many societies ‘other dynamics are at work as well,
dynamics that cut across these familiar and well-established
conceptual/historical boundaries’ (Sassen 2014, p. 8). Sassen writes of the
systemic logic that mostly produces 'expulsions'. Under the notion of
expulsion Sassen includes diverse conditions: the eviction of millions of small
farmers in poor countries, minority groups that are warehoused in prisons, the
impoverishment of the middle class in rich countries and austerity policies that
have shrunk many European economies (Sassen 2014, pp. 2-3).
Sassen’s analysis helps us to understand that today’s transformations can not
be conceptualized only in terms of extreme inequality, a higher incidence of
severe poverty, and the decline of the middle class: the relevance of these
changes and their effects is undeniable, but in many societies diverse
‘subterranean’ and less visible ‘trends’ are growing. Her point of inquiry is
the proliferation of ‘systemic edges’, where a condition takes on a format so
extreme that it cannot be easily captured by the standard measures of
governments and experts and so becomes invisible, ungraspable (Sassen 2015;
2014). In the case of the Italian middle class1, although much theoretical and
empirical research has documented the loss of security and upward mobility,
it does not capture and make visible the extent and intensity of these
‘subterranean trends’. Moreover, these trends are altering the societal
interaction and common ground between the middle class and other classes on
the one hand and its interest to support and defend welfare and public services
on the other.
A long trajectory of reform
The period 1991-2000 saw the first signs of a series of attempts at profound
structural reforms to the healthcare and pension systems and to social services
in Italy. The reforms affected the generosity of welfare benefits, especially
with regard to pensions and healthcare, but involved more than spending cuts
alone. These reforms were characterized by aspects of different worlds of
welfare’, which included measures to promote competition and the free
market in public health, new forms of labour market deregulation; and the
introduction of a multi-pillar model for the pension system. In addition, in
delivering public services, specific laws legitimized the role of the third sector,
and the system of social benefits and local social services was renewed and
extended to cover new risks (including substance abuse and the growth of non-
self-sufficient elderly people). As noted by Esping-Andersen (1999), in Italy
as in other European countries, by the end of the decade Italian welfare did
not appear to have been weakened, although some signs of crisis were already
evident, especially in, the growing disjuncture between the existing
configuration of welfare and exogenous change and the risks of a post-
industrial society.
The years between 2000 and the financial crisis of 2008 saw little overt
change. Nevertheless, in these years ‘hidden types of change’ (Hacker, 2004;
Streeck and Thelen, 2005; Hacker and Pierson 2010; Hacker et al., 2013)
weakened the welfare state. None of the reforms launched in the nineties has
changed in significant parts, but despite formal-institutional stability, Italian
welfare has changed significantly. Budgetary measures that have reduced
resources, the introduction of new policies without eliminating old ones and
apparently secondary governmental decisions have made the implementation
of innovative parts of the reforms more difficult. Furthermore, they have
changed the priorities and objectives of local social services, the health care
system, programmes to tackle poverty, the role of the third sector, and the
quality of provision and coverage of social risks. During this time, an array of
proposals for reforms to many domains of welfare was put forward, which,
however, lacked a unifying principle capable of bringing together the various
social and political actors from the union movement, the third sector, political
parties, and leaders of industry.
Since 2008, the situation has changed radically. The economic crisis and the
large public deficit, the growing aging population and the implications of this
for economic growth have lead to deep reforms in the pension sector, and
significant reductions of resources for public health and local social services.
Existing levels of benefit were reduced, but more importantly, this occurred
alongside a systematic rebalancing of the relationship between public and
complementary welfare.
Narrowing the gap
These changes were supported by the majority of political parties, a part of the
union movement and employer organizations and the wider public at large,
and were characterized by converging objectives and agreements around a
vision for the long-term future of the Italian welfare system. Even though the
impact of these changes on social protection coverage has been highlighted
(Ascoli et al., 2015), the degree to which they form part of a strategy to
introduce a new model of social protection is underestimated. In the past, there
has been a strong political and academic debate on the need to overcome the
critical issues that historically characterize the Italian welfare state: the
prominent role of the pension system, the fragmentation of policy design, the
weak social assistance net and the inconsistency of family policies (Ferrera,
2010; Ascoli, 2015). In the last decade, the proposals on how to overcome
these have become more radical in their aims, wanting to create a new welfare
architecture as a framework for the modernization of the Italian system.
(Ferrera, 2010). In general, mainstream political and academic actors do not
refer to pillars of the social investment approach: care for the elderly, childcare
and early education programmes and policies to reconcile work and family
life remain secondary fields in this strategy of modernization (European
Commission 2015; Morel et al., 2011). Furthermore, the budget for the new
social risk policies has hardly increased and the shift from protection to
activation is still weak. What is emerging instead is a new configuration of
welfare that is weakening the public system and enhancing the role of private
actors such as private health and pension insurance. The changes would mean
not only a reduction of existing levels of welfare benefits but also a stable
rebalancing of the institutional relationships between public and
complementary welfare.
The projects and initiatives proposed have had as a main reference the welfare
systems of Continental European countries (Germany, France, Belgium,
Austria, the Netherlands) and many of the institutional and structural changes
that they have undergone in the last decade. In these countries, post-industrial
modernization has had two sides: a strong pressure for retrenchment and a
pressure for welfare state expansion (Häusermann, 2010, pp. 1-10; Palier,
2010). In Italy, welfare retrenchment mainly occurs through an increase of
state control over social care benefits and public health expenditure; the
progressive privatization of health insurance; the reduction of early retirement
pensions; and the introduction of funded schemes for pensions.
The growth of complementary welfare, in Italy, as in other European
countries, has developed in parallel with retrenchment policies (Starke, 2006;
Greve, 2007; Streeck and Thelen, 2005). In Continental Europe, the side
effects of comparable changes to the welfare system are the division of the
population between insured insiders and assisted or activated outsiders (Palier,
2010) and the growing forms of dualization in terms of access to benefits,
efficiency and quality of services (Pallier and Kathleen, 2010; Seeleib-Kaiser
et al., 2011). In Italy, similar reforms are introducing even more profound
changes, especially in the way in which they are radically reducing the number
of people capable of accessing appropriate private insurance. Spending cuts
in social expenditure have been accompanied by de-universalization and
extensive dualization across many policy fields. This dualization has
historically affected two realms of welfare: job protection and pensions;
however, now it is occurring in other realms. For example, the protection
offered by the public health system is no longer sufficient and the population
is increasingly divided between those who enjoy adequate private protection
and those who are covered by very limited private insurance and occupational
schemes. Public welfare seems less and less capable of addressing the needs
of a large part of the middle classes, not only of households in a condition of
poverty. The living conditions of these intermediate strata have worsened by
the accompanying reduction in benefits: such families are at risk of having
both inadequate public services and limited access to private insurance. Many
are employed in small companies that do not provide their employees with
welfare benefits. Furthermore, many workers are poorly paid, lacking
economic security, and experience conditions difficult to reconcile with
family life, even in the presence of support programmes. In Italy, 11.5 percent
of people in work are at risk of poverty, compared to an EU-28 average of 9.5
percent (EU-SILC 2015 data). Recent years have witnessed a significant
decrease in the numbers of the most privileged categories of worker those
with the most protection as well as a further erosion of job protection,
pension benefits, and social security benefits for outsiders. Pallier (2012, p.
252) observes that in many countries, among which are Italy, Belgium,
Germany, and Austria, ‘public pensions provided through social security will
become so low that average-to-high earners will have to rely on occupational
and private schemes to obtain a pension commensurate with their past
earnings’. Increasingly, the pension system does not perform a redistributive
function (Natali, 2015; Jessoula, 2011) but instead differentiates benefits
according to distinctions in occupational categories, gender, standard and non-
standard jobs.
The new public and private welfare mix
The changing relationship between public and private welfare provision
presupposes a limited area of intervention for public welfare at both the
national and local levels and is aimed at a reduced number of beneficiaries:
those deemed to be in conditions of severe deprivation and who cannot gain
the material resources to live independently.
Contrary to declared intentions, however, the level of protection for
households in severe poverty is still low, as Italy is one of the few European
countries (together with Bulgaria and Greece) that lack a minimum income
scheme at the national level, having instead only weak regional or local
schemes. In 2016, a national scheme to tackle poverty was introduced and in
2017, it has been further improved; however, it is insufficiently financed, and
can deal only with the most dramatic cases of material deprivation.
In addition, the reforms and measures have generally weakened public
provision. In the health sector, Italy is one of 12 European countries that have
cut their health spending in the years 2008-2014; instead, France, Germany,
the Netherlands and Belgium increased their health spending in the same
period. Over the period 20082014, the share of the Italian population
reporting unmet needs for health care increased by 2.3 percentage points. In
the European Union (27 countries) as a whole, 2.4 percent of the population
cited excessive costs as the reason for not having their medical needs met. The
corresponding figure in Italy was 6.2 percent (Eurostat Statistics database,
based on EU-SILC 2016), while the proportion in the first income quintile was
even higher: 13.3 percent in Italy against 5.1 percent in the 28 countries of the
European Union. Looking back to the years before the financial crisis, the
share in the first income quintile in 2007 was 5.4 percent across the European
Union (27 countries) compared to 7.0 percent in Italy. As Table 1 shows, the
crisis has brought about a significant increase in the proportion of the first
three quintiles that are lacking access to health care, whereas the increase for
the fourth and fifth quintiles has been very small.
[Table 1 here]
With regards to local social services, the eligibility criteria for access to social
benefits significantly changed with the introduction in 2015 of a new means-
testing system (ISEE), classified as a proxy means test (Bitran et al., 2000;
Castano 2001). In some local contexts, the new means-testing system
identifies more accurately the economic conditions of social benefits
applicants and sets co-payments differentiated on the basis of income and
family assets. This approach does not constitute complete abandonment of the
universalism paradigm and in the literature is defined as ‘selective
universalism’ (Onofri, 1997) or ‘proportionate universalism’ (Marmot, 2010).
In other local contexts, the universalism paradigm has been greatly weakened.
The new means-testing system becomes a way of promoting social policies
targeted at low-income groups, with the risk that the vast majority of the
population - those who are not classed as poor - will progressively be excluded
from public welfare benefits. High family co-payments exclude or make
public services too expensive for a significant part of the middle class. All
means-tested local social benefits have been significantly reduced. The new
eligibility criteria for access to local social benefits in particular have cut the
coverage of childcare services: compared with 2011 after many years of strong
growth, the number of children accepted into public nurseries went down by
1.6 percent in 2014 and by 4 per cent in 2015 (Istat 2016).
The weakening of public welfare has occurred simultaneously to the
strengthening of related activities of private actors such as occupational
welfare, private pensions and health insurance that were more marginal in the
Regarding occupational welfare, although from 2005 to 2010 the gap between
Italy and other European countries was reduced, it remains significant
(Pavolini et al, 2013; Prandini 2008). The most recent surveys conducted by
the Italian National Institute of Statistics (ISTAT, 2015a) and Maino et al.,
(2015) revealed that more than half the companies declared that they had
introduced a welfare plan during 2014-2015. The vast majority of them
provide employee benefits in at least one form. These comprise of access to
pensions and health insurance, consumer discounts, loans, childcare, and other
fringe benefits geared towards the health and well-being of employees.
At the same time, the coverage of supplementary pension has been limited.
Only 24.2 per cent of all employees are covered by supplementary pension;
among blue collar workers, only 20.9 percent have a private pension
insurance, while among executives the same figure is 40.5 percent (Bank of
Italy, 2015; Jessoula et al., 2010). Interruptions to contributions are
widespread: in 2015 nearly 1.8 million members of supplementary pension
funds (out of a total of 7 million) did not make insurance contributions
(Commissione di vigilanza sui fondi pensione, 2016).
Private health insurance in Italy is taken out much less frequently than in other
European countries. Total private expenditure in Italy (comprising insurance
policies, out-of-pocket payments and patient co-payments) amounts to
approximately € 35bn, but only 15 percent of the total private expenditure is
handled through complementary insurance funds, as against 44 percent in
Germany, 67 percent in France and 41percent in the United Kingdom (OECD,
2015a; ANIA, 2016; De Angelis et al., 2016; CREA Sanità, 2016).
The 2008-12 economic crisis saw a further transfer of the burden of welfare
costs from the public sphere to private households. The middle classes in
particular began to feel the reduction of public provision and increasingly
turned towards the private sphere. Research also shows that in recent years
over 12.2 million Italians have increased their out-of-pocket spending on
private health services and that in the ten years from 2002 to 2012, total
expenditure on private health care has increased by 25.5 percent (Censis,
2013). In 2014, the Household Budget Survey conducted by ISTAT, reveals
that 4.4 percent of the total average family expenditure in Italy is destined for
the purchase of health services. In 2014, 77.0% of families spent income on
healthcare, in contrast to 58.0% in 2013 (ISTAT, 2015b; CREA Sanità, 2016).
A reductive representation of Italian society
The growing public-private mix appears to be mainly driven by economic
considerations towards the sustainability of the system in response to the Great
Recession, while granting access only to basic services for people considered
to be poor.
These changes in welfare are underpinned by a reductive representation of
Italian society. The Italian middle class family is represented as modern,
individualized, active and dynamic - a family that would certainly not consider
making use of local public services in order to meet its social and healthcare
requirements. The widespread belief among political actors is that a
considerable part of the middle class, having come through a period of
economic crisis, will now be able to invest a portion of its income to ensure
effective and high-quality social and health benefits that provide protection
against the risks of aging, prolonged illness and job loss.
In real terms, Italian society is marked by income inequality and a high
incidence of persistent poverty, but also by the growth of a ‘struggling Italy’,
in which many social groups have an increasing difficulty coping with daily
expenses, despite having levels of income above the conventional poverty
line. This condition is not linked to the onset of dramatic impoverishment, but
rather to a gradual decrease in income and an inability to enjoy the sort of
aspirational lifestyle which previously might have been taken for granted by
members of the middle class.
In fact, the Italian middle class has remained stable since the mid-1980s and
even after the 2008 economic-financial crisis, despite having economic
problems. Its size remained fairly steady at around 60% from the 1980s to the
2000s, with some fluctuations and a brief, sharp drop in the early 1990s
(Pressmann 2017). Even so, inequality has grown between the different
groupings that make up the middle class (ISTAT 2017). Eurofond (2017),
using EU-SILC data to analyse trends in income distribution over the period
20052014, notes that in Italy the size of the lower middle classes has
increased significantly more than the size of the upper middle class and the
top income class. In the years before this, much research has reported similar
findings using different longitudinal databases, such as the European
Community Household Panel, Bank of Italy Survey on Household Income and
Wealth, Longitudinal Survey of Italian Families, Work Histories Italian Panel.
From 1989 to 2006, many authors note that there has been a growth in the
differentials between the upper middle class and the lower middle class. This
is in addition to a polarization between high and low income self-employed
workers, a significant decrease in the income of manual labourers and white
collar workers (Schizzerotto 2009; Checchi 2012; Brandolini 2009). Albertini
(2013) notes a dramatic increase in the distance between the income and
median earnings of the professional-managerial class and those of white-collar
workers. Within the service class, the gap between the highest and the lowest
stratum has widened dramatically.
Furthermore, an OECD analysis (2015b) indicates that in Italy the biggest
impact of inequality is the growing gap between lower income households and
the rest of the population. This is true not just for the very lowest earners the
bottom 10% but for a much broader swathe of low earners the bottom 40%.
The analysis suggests that countering the negative effect of inequality on
growth is thus not just about tackling poverty but about addressing low
incomes more broadly; especially since the dominant mechanism through
which inequality seems to affect growth is by curbing opportunities for the
poor, the working class and the lower middle class (p. 21-27).
Taken together, these findings indicate changes that have not been adequately
emphasized. In the middle of the social stratification, between the established
middle class and multiply disadvantaged groups (semi-skilled and low-skilled
workers, the long-term unemployed, and people in conditions of persistent or
recurrent poverty), a sort of ‘middle mass’ is consolidating (Wilensky 1975:
118-119). This extended social stratum comprises of a large part of the middle
and working classes, who feel, to various degrees, that they are in a shared
condition of economic difficulty. Unlike Wilensky’s 'middle mass', this is a
social group that no longer has any meaningful relationship with the upper-
middle class and that views the bottom of the social stratification with fear
and worry.
What is more, the dimension of the population with a great likelihood of not
being able to access private services is more widespread in Italy than in other
European countries. A substantial part of the middle class actually lives in
precarious conditions and is at a high risk of poverty.
[Table 2 here]
In 2015, 39.9 percent of Italian households (32.3 percent in 2008) were
incapable of meeting an unscheduled expense (in Italy, amounting to 800
Euros), while 47.3 percent (39.5 percent in 2008) were unable to afford an
annual week of holiday away from home (EU-SILC, online database 2016).
The population at risk of poverty and exclusion (even considering the limits
of this indicator: Copeland and Daly 2012; Nolan and Whelan 2011) is
significantly higher in Italy than the average for other EU 27 countries as well
as countries such as France, Germany and the United Kingdom.
The percentage of individuals not in a condition of economic vulnerability
(calculated as those who over the four-year period of 2010-2013 had presented
no episodes of poverty) was equal to 69.5 percent of the population, compared
to an EU-27 average of 75.4 percent (EU-SILC, online database 2017).
Moreover, 13.2 percent of the population was assessed to be at risk of
persistent poverty (9.1 percent for the 27 EU countries), meaning they were
below the ‘at-risk-of-poverty threshold’ for the current year and at least two
out of the preceding three years (EU-SILC 2013 data). Furthermore, there is a
higher risk of entering into poverty, and lower chances of getting out of it.
Both the high entry rate and the below-average exit rate have been highlighted
in previous studies spanning the period 2008-2012 (Vaalavuo, 2015; Nolan
and Whelan, 2011).
Amendola et al. (2012), using the method employed by Bourguignon, Goh
and Kim (2004) and Chaudhuri (2003), have tried to estimate the incidence of
vulnerability to poverty, understood as an individual’s likelihood of becoming
poor in the future on the basis of studies conducted by ISTAT on the
consumption patterns of Italian households in the years 1985-2001. The
authors find that a high percentage of the population, even as much as 50
percent in some years, is concerned with the risk of slipping into poverty.
Unfortunately, they also observe that it is not possible to extend the analysis
to the most recent decades. However, it seems reasonable to assume that things
would have got worse rather than better (Amendola et al 2012).
Based on both ECHP and EU-SILC data, analyses by Whelan and Maître
(2008, pp. 652-653) and Nolan and Whelan (2011, pp. 196-205) document
absolute variations in poverty across social classes in two time frames (1994-
1998 and 2006). Using data from ECHP, Whelan and Maître (2008) reveal
that the economic invulnerability of individuals having presented no episodes
of poverty over a five-year period (1994-1998) is subject to variation
according to occupational class. In Italy, the economic non-vulnerability of
individuals ranged from almost 86 percent of entrepreneurs, consultants and
management staff to 51.3 percent among routine occupations (ESeC, Class 9).
Lower services and lower technical occupations (Classes 7 and 8) scored a
similar value of approximately 53.5 percent for economic non-vulnerability,
while lower supervisory and lower technician occupations (Class 6) scored
62.9 percent. An additional analysis by Nolan and Whelan (2011) based on
data from EU-SILC 2006, confirms that in all countries there is a stronger risk
of poverty and deprivation for classes from 3 to 8 than for classes 1 and 2.
These social groups experience income and life conditions that generally risk
being insufficient to access adequate protection in the private welfare system.
The income and assets of a large part of this stratum is not sufficient to provide
access to private services and, as the Luxembourg Income Study databases
point out, a reduction in social transfers has a similar effect to their income as
that of the lower classes (Bigot et al., 2012).
Conclusions: the need for a different public-private mix
In my paper, I have argued that the Italian welfare system is increasingly
evolving independently of the changes on the living conditions of the middle
class. It seems less and less capable of protecting the middle class from the
growing risk of instability, and does little to foster social mobility or improve
their social and economic conditions.
In my analysis I have tried to suggest that the problem for Italian society
comprises not only in the high incidence of persistent poverty, but also the
impacts of diverse ‘subterranean’ and less visible ‘trends’ that are not only
worsening its living standards but also altering the relationship of the middle
class with other classes. The divide between the middle class and the working
class that underpinned class analysis since its foundation is becoming less and
less clear (Savage et al. 2015). Furthermore, these dynamics create an
extended social stratum characterized by tightened household budgets, a
growing risk of exposure to short-term and occasional poverty, and low
upward mobility. This social stratum consists of a considerable part of the
middle and working classes and its position in the social stratification is
between the established middle class and multiply disadvantaged groups. The
differences between this social stratum and both the established middle class
and multiply disadvantaged groups are increasing.
The growing gap between the economic and social dynamics affecting this
stratum and the new configurations of public and private welfare has been the
focus of my analysis.
In my paper, I argued that a large part of the current changes of Italian welfare
- new forms of dualization, processes of de-universalization, programs to
target low-income groups - have impacts on the middle class that are
underestimated by policymakers and by the majority of social and political
actors such as the trade union movement, the third sector, and political parties.
The living conditions created by these processes place the middle class at risk
of not having sufficient public services, at the same time as having only a
limited ability to access complementary welfare. Public services contribute
little to the improvement of living conditions of this social stratum. What is
more, public services are increasingly incapable of creating opportunities for
these individuals through active support programs. Moreover, private
insurance is mainly available to the established middle class and occupational
welfare tends to favor those who are already embedded in the labour market
and to exclude those who are not or have a precarious employment situation.
Therefore, growing private welfare provision plays a compensatory role
almost exclusively only for social groups with consolidated incomes and
employment, and is not accessible to a large part of the population.
In general terms, it can be argued that social policies can not cope with the
social effects of inequality and growing poverty, neither are they able to
conceptually grasp the 'subterranean trends' which Sassen refers to, nor to
suggest adequate solutions to tackle them. In many ways, social policy is
subordinated to the prevailing logic of economic development and focuses
only on a few old social risks. During the first decade of the new millennium
the Italian welfare system was weakened by retrenchment and hidden changes.
After the economic crisis, budgetary measures and reforms altered the
interplay between public and private welfare. Now, I believe, it would be
harmful to the majority to continue introducing further processes of de-
universalization and further forms of dualization.
1. As we know, defining the middle class has always been contentious (Butler et al, 1995)
and there is much instability between the different groupings that are said to make up the
middle classes. Much empirical research tries to operationalize the concept of the middle
class employing either income-based variables or occupational schemes such as the
European Socio-Economic Classification (ESeC) known as the Erikson-Goldthorpe-
Portocarero (EGP) Scheme (Erikson and Goldthorpe, 1992; Goldthorpe 1997). Other
authors have developed a multi-dimensional way of registering social class differentiation
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... These proposals would not only mean a reduction of the existing levels of welfare benefits, but also a stable rebalancing of the institutional relationships between public and complementary welfare, towards a new configuration of welfare that weakens the public system and enhances the role of private actors such as private health and pension insurance providers (Siza, 2018). The projects and initiatives proposed have had as a main reference the welfare systems of Continental European countries (Germany, France, Belgium, Austria, and the Netherlands) and many of the institutional and structural changes they have undergone in the last decade (Siza, 2018). In these countries, welfare systems have not become similar, differences between welfare state types persist, but they manifest an increasing similarity over time and are converging towards a 'hybrid' welfare configuration (Bennett, 1991;Heichel, et al., 2005;Knill, 2005;Bannink and Hoogenboom, 2007). ...
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What we observe in Italian society is not a collapse of the three pillars of social and system integration of contemporary societies: work, family, and welfare. The COVID-19 pandemic has reversed two social and institutional trends that in last two decades had damaged these spheres of life and that seemed relentless. Firstly, what has been reversed are: the progressive privatization of welfare and the enhancement of the politics of retrenchment; secondly, values and styles of life, radical processes of individualization, that undermined mutual relations of support and care, and households’ ability to cope with old and new risks. At the same time, the pandemic is radicalizing the long-lasting tendency towards job insecurity, a high incidence of low-paid workers, and a high proportion of undeclared work. The highly differentiated impacts of the pandemic on these three spheres of life are creating a wider plurality of living conditions and risks. The research draws on Castel’s distinction between three ‘zones’ of post-Fordist employment societies with the aim to identify the processes and the conditions that carry individuals from one ‘zones’ to the other. Theoretical considerations are supported by the findings of several qualitative and quantitative research carried out during the pandemic mainly by government agencies and international organizations as OECD and WHO.
... In the past three decades, the Italian middle class has become heterogeneous and fragmented, with regard to both wealth and labour market position, and significant income differences can be found within this social group (Atkinson & Brandolini, 2011;Bagnasco, 2016;Dagnes et al., 2018;Siza, 2018). The 2008 crisis has had profound effects on incomes and social stratification. ...
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Access to homeownership for young adults is becoming more and more difficult. Italy – where homeownership rates for young adults are steadily decreasing – is a case in point. In the recent past, becoming homeowner was an obvious housing pathway for Italian young adults, even from lower-middle class families. If your parents were homeowner, you became homeowner as well, often with the help of intergenerational transfers. However, the Italian reproduction of homeownership is under severe pressure, as a result of the economic crisis and the subsequent austerity measures. Through in-depth interviews with young adults and their parents, this paper shows how deeply ingrained social expectations and aspirations surrounding homeownership – together with an objective lack of rental options – result in young adults staying longer in their parental home and becoming independent at a later age. This may have a negative impact on the social and economic dynamics within Italian society.
... By referring to the threat of precarity and exclusion, this narrative constructs the middle not as the stable core but as a fragile and vulnerable margin. Middle-class members are said to face the omnipresent risk of social decline while their prospects of upward mobility are continually decreasing (Siza 2017). The welfare state is blamed for no longer providing protection against the increasing risks of modern society. ...
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In this last decade the 'stage where welfare takes place' has changed significantly. Despite this, many European countries are continuing to propose programmes and actions that are progressively less effective, in particular activation programmes, those that promote work-life balance and programmes to tackle economic and social precarity and poverty. Their ineffectiveness is partly due to the principles and the initial design of these programmes and, to a greater extent, how they have been implemented in the last decade. The 'stage where welfare takes place' has changed because of two main processes. Firstly, the radicalization of the effects of many social risks (economic insecurity, low-paid jobs, family instability, the growth of non-self-sufficient elderly people, economically dependent young adults). Secondly, but perhaps to a greater extent, the weakening of the world that we call "social", which it was thought would have guaranteed economic resources, care and collaborative relations.
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Il Piano nazionale di Ripresa e Resilienza non è una shopping list, cioè un elenco di progetti slegati fra loro, ma una piano che assume l’obiettivo di modernizzare e rafforzare il potenziale di crescita della società italiana e affrontare le sue criticità storiche. Cioè che emerge, però, sono gli scarsi riferimenti alla qualità del lavoro, al livello medio delle retribuzioni, alle condizione di vita delle famiglie italiane, alla loro crescente precarietà economica e sociale. Si parla molto brevemente di contrastare il lavoro sommerso, di condizioni estreme ben individuate come le persone senza dimora, poco di povertà ma ancora meno di condizioni di vita molto più diffuse che coinvolgono la maggioranza delle famiglie italiane. In realtà, è la normalità delle posizioni lavorative che preoccupa.
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In Italy, welfare retrenchment mainly occurs through an increase of state control over social care benefits and public health expenditure; the progressive privatization of health insurance; the reduction of early retirement pensions; and the introduction of funded schemes for pensions. The reforms have had as a main reference the welfare systems of Continental European countries (Germany, France, Belgium, Austria, the Netherlands) and many of the institutional and structural changes that they have undergone in the last decade. In these countries, post-industrial modernization has had two sides: a strong pressure for retrenchment and a pressure for welfare state expansion (Häusermann, 2010, pp. 1-10; Palier, 2010).
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The welfare state has played an important role in promoting social integration without discrimination and distinctions. In the last years, welfare has become an area of intervention which is less and less inclusive: "conditional welfare" and "welfare chauvinism" are the two main configurations of this emerging system of social interventions. Welfare is increasingly selective and systematically reduces access to benefits for immigrants, ethnic minorities and traditionally 'undeserving' groups, the homeless and other people whose val-ues and behaviour are considered the primary cause of their condition.
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Our understanding of western societies is heavily influenced by research on the unequal distribution of wealth and income. Stiglitz (2015), Atkinson (2015), and Piketty (2014) note the dramatic increase in income disparity between ‘the richest 1 percent and the rest’ and the growing concentration of wealth and income in the upper classes. Stiglitz (2016: 169) and Hacker and Pierson (2010) note that the rise in the wealth and income of the 1 percent directly correlates to the growing financial difficulties of the middle classes and inequality of opportunity and outcome. It is only in the last decades that social inequalities have become central to any understanding of the middle class and of social stratification (Payne 2013). In the 1990s, when inequality began to rise in many OECD countries, research focused on the increase of poverty or on the consequences of deregulation, rather than on the decline of the middle classes and how to tackle this (OECD 2011; Kenworthy, 2007; Dallinger, 2013; Giesecke et al., 2003). In my paper, I argue that a large part of the research focused on the relation between extreme inequality and the decline of the middle class does not capture the extent of the changes in its living conditions, the level of hardship and the impact on civil coexistence and the functioning of economic and political institutions.
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Nelle strategie emergenti nei welfare europei, il welfare attivo si trasforma in un welfare condizionale in cui le relazioni di cura perdono rilevanza e prevalgono politiche di controllo nelle prestazioni di welfare, l’accesso ai servizi dipende dal comportamento responsabile del beneficiario. I beneficiari che non si comportano in modo responsabile (hanno comportamenti moralmente riprovevoli, non rispettano le prescrizioni, non si impegnano a cercare un lavoro, non accettano il lavoro offerto, non frequentano corsi di aggiornamento) subiscono la riduzione o la sospensione dei benefici previsti (Harrison e Sanders 2014; vedi anche il sito I beneficiari di prestazioni di welfare (dalle persone che abitano case popolari ai senza dimora) sono soggetti al rispetto di numerose condizioni, in termini di stringenti requisiti di accesso (reddito, condizioni occupazionali, disabilità), ma soprattutto devono assumere determinati comportamenti per evitare la revoca dei benefici concessi.
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The Italian welfare system emerged under two different political regimes: the competitive, Liberal regime from the country unification (1861) to 1922, and the Fascist regime (1922-1943). The profound variation of the political background, however, did not have a decisive impact on the institutional traits of social protection schemes that from its inception displayed a Bismarckian imprint. They were in fact built along occupational lines – aiming to protect dependent workers primarily – and financed through social contributions paid by employers and employees (though the state contributed with a share of the total cost, i.e. tripartite financing); benefits were broadly contributions related and differentiated among occupational groups and categories (private/public employees, blue/white collars). After World War II the bulk of the system was managed by a public institution2 – the national institute for social insurance Inps (Istituto nazionale della previdenza sociale) – which was structured on several funds (casse or fondi) for different risks (old-age , survivors, disability , unemployment , family and sickness) and professional categories – i.e. initially dependent workers in the private sector as the self-employed were covered in the 1950s-1960s (see below). Inps was originally administered by civil servants , while the social partners would be formally involved in the management at the end of the 1960s. This change was important because it granted the social partners (especially the unions ) formal legitimacy to participate in the social protection policy-making, but it should not be overestimated. In fact, on the one hand the unions had until then relied on a more direct channel for interest representation, as the parliamentary groups of the major parties – the Christian Democrats (DC), the Communist Party (PCI) and the Socialist Party (PSI) – had a ‘union component’ which included some unions ’ leaders. On the other hand, major decisions in the field of welfare policies were in the hands of political and institutional actors, such as the government and the Parliament . Section 2 briefly sketches the development of the Italian welfare system during the so-called golden age (1945-1975). Section 3 constitutes the core of our analysis, dealing with four different sequences of welfare reform: a) the ambivalent interventions of the 1980s; b) the first retrenchment reforms in the period of fiscal emergency (1992-93); c) the path-breaking reforms of the mid- to late 1990s; d) the growing tension between these modernizing interventions and more conservative measures in the recent years (2000-2008). Finally, in section 4 we propose an evaluation of the trajectory of reform of the Italian welfare system. Against this background, in the following paragraphs we do not pretend to provide an encompassing analysis of welfare and labor market developments in Italy.3 We rather aim to interpret the trajectory of development and reform of the Italian social protection system by focusing on four different factors. First, sequencing, as we argue that major departures from the institutional path have been triggered by a stepwise process of reform. Second, we analyze how Bismarckian institutions have contributed to mold both the policy-making and the outcomes of reform. Third, we evaluate the influence of Europe on the reform trajectory, also aiming (fourth) to shed a light on likely processes of (policy and social) learning that might facilitate change.
Poverty, increased inequality, and social exclusion are back on the political agenda, not only as a consequence of the Great Recession of 2008, but also because of a seemingly structural trend towards increased inequality in advanced industrial societies that has persisted since the 1970s. Policies in labor markets, social policy, and political representation are strongly linked in the creation, widening, and deepening of insider-outsider divides--a process known as dualization. While it is certainly not the only driver of increasing inequality, its development across multiple domains makes dualization one of the most important current trends affecting developed societies. The comparative perspective of this book provides insights into why Nordic countries witness lower levels of insider-outsider divides, whereas in continental, liberal and southern welfare states, they are more likely to constitute a core characteristic of the political economy. Most importantly, the comparisons presented in this book point to the crucial importance of politics and political choice in driving and shaping the social outcomes of deindustrialization. While increased structural labor market divides can be found across all countries, governments have a strong responsibility in shaping the distributive consequences of these labor market changes. Insider-outsider divides are ultimately the result of political choice. A landmark publication, this volume is geared for faculty and graduate students of economics, political science, social policy, and sociology, as well as policymakers concerned with increasing inequality in a period of deep economic and social crisis. (Résumé éditeur)
Having a job is itself important in order to gain income. However, there seems also to be more often hidden aspects of labour market participation that might include more dualization in welfare states. This article will focus on occupational welfare in Denmark. The definition of occupational welfare used in this article revolves around especially on collective solutions, e.g., decisions taken among the labour market partners. Whether this is supplementary or substitute for public welfare is thus not the central scope of analysis, neither as at least a starting point whether the development has been supported by fiscal welfare (taxexpenditures). Emphasis will be on the core aspects of what the social partners in Denmark - sometimes as part of tri-partite agreements - has focused on that resembles or can directly be seen as provision of welfare either as services or benefits in-cash delivered only to those being on the labour market. It shows how occupational welfare has developed in two central welfare policy areas - such as pensions and family life. The question for the article is thus whether more occupational welfare challenges the universal approach in the Danish welfare state or just supplements existing welfare. A further question is whether and how this might influence equality in a Nordic welfare state. The article shows that the development towards more occupational welfare in these specific areas are argued to be mainly driven, in relation to pension, a historical need to increase saving, and with regard to family life the change in roles between men and women implying a need for a stronger focus on how to reconcile work and family life. These changes are further driven mainly as a way of supplementing the universal welfare state. However, these changes also imply new types of dualization and degrees of inequality between those more and those less strongly attached to the labor market.
In this book addressing how best to reduce contemporary large-scale income inequality, Prof. Atkinson considers economic inequality from a new perspective, drawing on extensive historical data covering more than a century of evolution in modern societies. In the first of the book's three parts, the author explains his research motivation and poses the following questions. What does inequality mean? To what extent is it expanding today? Has history ever witnessed periods of declining inequality? How can economic theory explain inequality? The second part of the book is devoted to specific political and economic policies designed to reduce inequality. In the third part, the author assesses the extent to which the policies he proposes can be considered realistic, discussing the pros and cons of enacting and implementing them. The Journal of Economic Sociology publishes the first chapter "Setting the Scene," which puts readers in the picture by discussing the notion of inequality and its extent. Demonstrating the term's multiplicity of meanings, Atkinson argues that all questions concerning its main dimensions should be answered before searching for its foundations.