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- Labour Market, Social Cohesion, and Much More: a Primer on Welfare in Italy -

- Labour Market, Social Cohesion, and Much More: a Primer on Welfare in Italy -. Ijin Hong Sungshin Women’s University ijindottorato@daum.net. Outline. Some background: a regressive cycle? The federal reform Ageing and low fertility Poverty and inequality A segmented labour market

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- Labour Market, Social Cohesion, and Much More: a Primer on Welfare in Italy -

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  1. - LabourMarket, Social Cohesion, and Much More: a Primer on Welfare in Italy - Ijin Hong Sungshin Women’s University ijindottorato@daum.net

  2. Outline • Some background: a regressive cycle? • The federal reform • Ageing and low fertility • Poverty and inequality • A segmented labourmarket • The Italian welfare state now and then • History • Southern European welfare states • Structure ☞A focus on labour market policies • Civil society • Why is it difficult to change • Economic crisis • Difficult reforms: the political hitch • Social consequences of the crisis • In conclusion: ways ahead? • The risk of an economic recession • What to learn from the case of Italy

  3. Some background: A regressive cycle? The federal reform Ageing and low fertility Poverty and inequality A segmented labour market

  4. 1. The federal reform • Difficult administrative/political balance: central or federal government? • ☞The federal reform has been the main issue for the political agenda of the Berlusconi government in 2001 (Northern League party’s influence) • The 328/2000 law (Frame law for the realization of an integrated system of interventions and social services): several actors and governance levels • Central state (responsible for setting minimum levels of care – LEA) • Regions (planning, monitoring, coordination) • Provinces, Municipalities (implementation, service delivery) • Third sector accreditation standards • 2001 reform of the 5th title of the Constitution: regions almost completely in charge of social policies (Pizzuti 2011)

  5. 2. Ageing and low fertility Age pyramids for year 2010 and year 2035 (projections) (Hong 2012)

  6. Fertility per regional area, 1952-2010 (홍이진 편 2012)

  7. 3. Poverty and inequality • Income inequality: • By region: In 2004 the Gini index scored 29.8% in the North-East, 31.6% in the North-West, 28.3% in the central regions excluding Lazio, 33.7% in Lazio, 35.4% in the Islands. While Lazio is the most unequal region in Italy, Friuli and Trentino are the most equal (26.2 and 26.6%). • Worsened trend: according to LIS data, the Gini index has worsened from 29% (1991) to 34% (1993) • Reasons: abolition of the «scala mobile» effect in the 1980s? Currency, political, and economic crisis of the Amato government (1992)?

  8. Income inequality in a comparative perspective (Pizzuti 2011)

  9. Gender inequality • After Turkey and Mexico, Italy has the third lowest labour force participation rate (51%) among OECD countries (65%). Less than 30% of children under three years of age attend day-care services and about • one-third of Italian working women works part-time to reconcile work and family commitments (OECD average is 24%). • Women are often regarded as the main "family carer": Italian women do on average 3.7 hours a day of household work more than men, holding back growth in female employment growth. (www.oecd.org/gender/closingthegap.htm)

  10. Intergenerational inequality • Low employability of younger cohorts: partly due to the labour market’s structure, partly to overeducation • High intergenerational transmission of income inequalities (lack of merit) (Franzini 2010) • Poverty: • Istat: in 2008 relatively poor families were 2,737,000 (11.3% of population) • Eurostat: for the same period, relative poverty has been estimated at 20% of the population (60% of the median income) • High children’s poverty: 25% (only Romania and Bulgaria in the EU are doing worse) • Working poor, elderly people with dependent family members, short-term contracts also vulnerable to poverty. (Franzini 2010)

  11. 4. A segmented labour market Source: 홍이진 편 2012 • Flexibility without security: • Labor market reforms (1997 and 2003) aimed at decreasing unemployment levels and increasing low employment rates (still in 2008, 58.7% of the total working age population against a European average of 65.9%): the use of temporary work contracts was consistently liberalized increase of temporary workers! • Dualization of the labour market: marked inequality in labor and social conditions between standard and non-standard workers (홍이진2012, ch.2.1)

  12. Corporatism & market failure: • the Italian wage setting system is centered on national collective agreements at industry level, whose provisions extend to all workers and firms and thus establish minimum wages. • Decentralized wage bargaining at firm level is intended to integrate workers' wages with top-ups tailored on the specific conditions of individual firms relevant disparities in wage levels across firms depending on their size • Professional orders system limiting access to the labour market (lawyers, doctors, journalists, accountants, etc.) • Over education problem: the Italian labour market has a production structure that does not encourage accumulation of human capital • % of people with a university degree is already low by OECD standards: 13% vs. a OECD average of 27% in 2006 (Franzini 2010).

  13. The Italian welfare state now and then History Southern European welfare states Structure Civil society

  14. 1. History (홍이진 2012) Themes: ■Top-down welfare development; ■ Failed recalibration?

  15. 2. Southern European welfare states • Institutionalized health care, fragmented pensions, high level of particularism and clientelism (Ferrera 1996). • Low levels of expenditure (Raitano 2012) • Low levels of redistribution (Kammer et al. 2012) • Focus on income protection, small scope for social services in kind. • Protection strongly depends on the employment situation (Palier 2010). • Institutional stickiness/difficulties in reforming the system.

  16. 3. Structure: old risks vs. new risks hybrid ☞For more details: 홍이진편(2012) Central government Agreements with social parts Local governments

  17. Social protection spending in selected Bismarckian countries in 2009 (% of GDP) Source: 홍이진 편(2012).

  18. Public social expenditure in Italy, by sectors Unit: Current LCU Source: OECD (2012). ☞ Institutional stickiness?

  19. * A focus on labour market policies Source: 홍이진 편(2012)

  20. Three central features typical of the Italian system of so called 'social shock absorbers' (ammortizzatorisociali). • A traditional predominance of short time work schemes – the Wage Compensation Fund (WCF, CassaIntegrazioneGuadagni) over unemployment benefits. • The WCF provides a wage replacement for workers who are affected by temporary work suspensions during periods of firm's crisis. • Arelevant segmentation in the organization of public schemes across different economic sectors and firm size classes makes up for the 'corporatist' (Ferrera 1996) character of social shock absorbers. • ConjuncturalWCF covers firms and workers mainly in manufacturing sectors • structuralWCF introduces a further differentiation in terms of size class, as it includes only larger firms in the manufacturing, commercial and touristic sectors. • Workers in the latter firms are also entitled to a special unemployment benefit – the mobility allowance – intervening after collective dismissals. • the Italian income support system is exclusively based on social insurance mechanisms. • Moreover, strict eligibility rules have the effect of barring access to unemployment benefits for young entrants in the labor market and discontinuous workers. • According to recent estimates, 3.2 millions Italian workers who lose their job are excluded from any income protection scheme (홍이진 편 2012)

  21. 4. Civil society • Income inequality and the “television model” (Franzini 2010): • Highest income levels for superstars from TV shows and sport (football) • Creation of an audience as an economical resource generating revenues with no connection to the public’s willingness to choose its services • Political parties and the lack of ideologies • PD L, PD, 5-Star Movement (M5S) • Politicization of the social rights: Low representativeness of the socially vulnerable groups in politics (labour market fragmentation does not help)

  22. Why is it difficult to change? Economic crisis Difficult reforms: the political hitch Social consequences of the crisis

  23. 1. Economic crisis «Excessive austerity in Southern European countries is the consequence of policies that for too long neglected sustainable growth, thus accumulating strong public and private debts. [...] A mountain of deteriorated credits is burdening the banks and ushering to a flow of public spending to the industry. Why don’t we think of the society, the ultimate bearer of all these troubles?»(lavoce.info, 2013/11/08) ☞Political opportunism of elites: blaming the constraints to the budget given by EU requirements!

  24. GDP growth and household final consumption expenditure growth Unit:% Source: World Bank (2012).

  25. 2. Difficult reforms: Reforming Bismarckian welfare states • “Frozen landscape” (Pierson 2006), “Elephants on the move” (Hinrichs 2000) • Conservative-corporatist welfare states: • Preservation of status differential • Social insurance-based system with a focus on income protection (highly fragmented) • Church, traditionalism, and the subsidiarity principle • Southern European welfare systems: • Employment situation • Particularism and clientelism (political vein) (Ferrera 1996) • Increasing inequalities (Kammer et al. 2012)

  26. The political hitch: Social policy reform mechanisms in Italy (Hong 2013) • Cognitive activity of policy elites: • State-capital nexus • Clientelism/Corporatism • Institutional inertia & conservatism • Policy learning part is missing • EU influence for change • World (economy, society): • Weak working class • Needs ≠ problem area • Considerable media constraints • ①-②: Vicious circle, lack of substantive welfare reform • ③-②: Difficult feedback • ②-③: Welfare cuts

  27. 3. Social consequences of the crisis • Austerity measures implemented by the Montigovernment: avoiding the risk of default for the Italian economy. • Welfare cuts policy, especially politically weakest sectors, i.e. education, health, and social services. • Overall social vulnerability worsening • Unemployment levels soaring up • Intergenerational, gender, and territorial inequalities contributing to a difficult social mobility in Italy.

  28. Unemployment rate 1992-2012, per gender and age

  29. In conclusion: ways ahead? The risk of an economic recession What to learn from the case of Italy

  30. 1. The risk of an economic recession *crash* • The federal reform • Ageing and low fertility • Poverty and inequality • A segmented labourmarket • Economic crisis • Neoliberal cuts to welfare… • Problems accumulate instead of being solved: gender, territorial, income, intergenerational inequalities, labour market dualization, segmented labour market & social security system…

  31. 2. What to learn from the case of Italy • Avoiding the political hitch : • Neglect of real societal needs (top-down approach) • Political decision makers’ blame avoidance (ex. Referring responsibilities for austerity measures to EU institutions) • Lack of agreed upon definitions of the collective good and accepted levels of inequality • Vulnerability to the economic requirements dictated by the world’s economy and financial institutions whenever the country is hit by a bad economic situation (Hong 2013) • Getting feedback from civil society  agreeing on some standard of social justice • An active involvement of trade unions and civil society to the decision making process • Amore transparent media information system • Amore democratic competition in the political arena can help in keeping the whole policy change mechanism (Sabatier 1988) work more efficiently.

  32. References 홍이진(편)(2012). 주요국의 사회보장제도: 이탈리아. 한국보건사회연구원. 홍이진(2013). Italian welfare in the aftermath of economic crisis. Understanding welfare reforms in the light of alternative theoretical approaches. 한국사회정책 20(3): 197-221. Ferrera, M. (1996). The ‘Southern model’ of welfare in social Europe. Journal of European Social Policy. 6(1), 17-37. Franzini M. (2010). Ricchi e poveri: l’Italia e le disuguaglianze (in)accettabili. Universita` Bocconieditore. Hinrichs, K. (2000). Elephants on the move. Patterns of public pension reform in OECD countries. European Review. 8(3), 353-378. Kammer, A., Niehues, J., Peichl, A. (2012). Welfare regimes and welfare state outcomes in Europe. Journal of European Social Policy. 22(5), 455-471. OECD (2012). OECD Social Expenditure database 1980-2009. Paris: OECD. Palier, B. (2010). A long goodbye to Bismarck? The politics of welfare reforms in continental Europe. Amsterdam: Amsterdam University Press. Pierson, C. (2006). Beyond the welfare state: the new political economy of welfare. Polity Press. Pizzuti, F.R. (2011). Rapporto sullo stato sociale. Academia Universa Press. Raitano, M. (2012). 소득분배와 사회보장 재정. 홍이진(편). 주요국의 사회보장제도: 이탈리아. 한국보건사회연구원. Taylor-Gooby P. (eds.) (2004). New risks, new welfare: the transformation of the European welfare state. Oxford University Press. World Bank (2012). World Development Indicators. Washington DC: WORLD BANK. www.dati.istat.it

  33. 감사합니다~Grazie. Ijin Hong Sungshin Women’s University Email: ijindottorato@daum.net

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