Poverty and Social Exclusion in Italy EU and Italian Indicators Annex to the NAP/incl 2003 1 1 The annex was drawn up by Paolo Sestito (Italian Ministry of Labour and Social Policies) and Raffaele Tangorra (Department of Economic Affairs of the Italian Prime Minister s Office, Indicators Subgroup of the Social Protection Committee of the EU) and Cristina Freguja (ISTAT). The statistical data were collected mainly by ISTAT (in particular, by Mario Albisinni, Francesca Gallo and Nicoletta Pannunzi). Paragraphs 9.2 and 9.3 were written by Francesca Utili (Department for Development and Cohesion Policies of the Italian Ministry of Economy and Finance).
Table of Contents Introduction p. 5 Overview: current demographic changes p. 6 1 - Economic Poverty p. 17 2 - Living Conditions p. 37 3 - Economic Inequality p. 44 4 Participation in Employment and Social Exclusion p. 48 5 Education and Training p. 56 6 - Poverty and Social Exclusion of Minors p. 59 7 State of Health and Social Exclusion p. 62 8 Social Participation p. 66 9 Regional Cohesion p. 70 10 Policies p. 76 1
Indicators Overview: current demographic changes 0.1 Italian Population p. 6 0.2 Fertility p. 8 0.3 Foreign Population p. 10 0.4 Household Type p. 12 1 Economic Poverty 1.1 Risk of poverty rate p. 17 1.2 Persistence of risk of poverty p. 26 1.3 Severity of risk of poverty p. 28 1.4 Dispersion of risk of poverty p. 29 1.5 Risk of Poverty with fixed poverty threshold p. 30 1.6 Absolute risk of poverty p. 32 1.7 Risk of poverty before social transfers p. 34 1.8 Perceived poverty p. 35 2 Living Conditions 2.1 Material hardship Housing p. 38 2.2 Material hardship Commodities p. 40 2.3 Living conditions Area of residence p. 41 2.4 Access to services p. 42 3 Economic Inequality 3.1 Income inequality Relationship between top and bottom quintiles p. 45 3.2 Income distribution inequality Gini coefficient p. 46 3.3 Horizontal inequality p. 47 4 Participation in Employment and Social Exclusion 4.0 General labour market conditions p. 48 4.1 Long-term unemployment p. 49 4.2 Jobless households p. 51 4.3 Risk of poverty of the employed p. 53 4.4 Risk of poverty and household participation in the labour market p. 55 2
5 Education and Training 5.1 Young people with low educational attainment p. 56 5.2 Adults with low educational attainment p. 57 5.3 Early school-leavers p. 58 5.4 Lifelong training p. 59 6 Poverty and Social Exclusion of Minors 6.0 Minors (under 18) General outlook p. 59 6.1 Poverty of minors risk (before and after social transfers), persistence and severity of poverty p. 60 6.2 Minors in jobless households p. 61 6.3 Hardship of minors p. 61 7 State of Health and Social Exclusion 7.1 Life expectancy p. 62 7.2 Perceived state of health and economic condition p. 64 7.3 Multi-chronic persons p. 64 7.4 Disabled persons p. 65 8 Social Participation 8.1 Socially isolated persons p. 66 8.2 Social, cultural and political participation p. 67 8.3 Social and family support networks p. 68 9 Regional Cohesion 9.1 Regional dispersion of employment p. 70 9.2 Regional Development p. 71 9.3 Public sector capital expenditure at regional level p. 74 10 Policies 10.1 Social protection expenditure p. 76 10.2 The ISEE Information System p. 78 3
EU Indicators Primary Indicators 1. Risk of poverty (Tab. 1.1a) p. 18 2. Persistence of risk of poverty (Tab. 1.2) p. 27 3. Severity of risk of poverty (Tab. 1.3) p. 29 4. Inequality of income distribution relationship between top and bottom quintiles (Tab. 3.1a) p. 46 5. Long-term unemployment rate (Tab. 4.1a) p. 50 6. Jobless households (Tab. 4.2 and Tab. 6.2) p. 53, 61 7. Young people with low educational attainment (Tab. 5.1) p. 57 8. Life expectancy (Fig. 7.1a) p. 63 9. Perceived state of health and economic condition (Tab.7.2) p. 64 10. Regional cohesion regional dispersion of employment (Tab. 9.1) p. 71 Secondary Indicators 11. Persistence of risk of poverty with lower poverty threshold (Tab. 1.2) p. 27 12. Dispersion around the standard risk of poverty threshold (Tab. 1.4a) p. 29 13. Risk of poverty with fixed poverty threshold (Tab. 1.5a) p. 31 14. Risk of poverty before social transfers (Tab. 1.7) p. 35 15. Income inequality Gini coefficient (Tab. 3.2) p. 47 16. Long-term unemployment share (Tab. 4.1a) p. 50 17. Very long-term unemployment rate (Tab. 4.1a) p. 50 18. Adults with low educational attainment (Tab. 5.2) p. 57 4
Introduction This document accompanies the Italian National Action Plan Against Poverty and Social Exclusion (NAPincl) and illustrates the social situation of the country using both EU and national indicators, although it does not presume to provide an exhaustive picture, especially as regards the public policies operating in this sector. It would indeed not be possible to provide such a description also owing to the failed application of the Welfare Information System as provided by the Welfare Framework Law (L. 328/2000), as no systematic structure exists in which to frame the statistical data given below, particularly that from administrative sources, and which would be indispensable if a complete picture of current policies were to be drawn up. In any case, to attempt an overall analysis and assessment of the policies against poverty and social exclusion would not be appropriate here; for in-depth information on this subject the reader is referred to the periodic reports of the Commissione d indagine sull esclusione sociale (Social Exclusion Commission) 2. The information provided here is structured in accordance with the social indicators defined by the EU (the so-called Laeken indicators 3 ) and the Italian national indicators and statistical data (third level indicators) considered relevant towards providing a clearer illustration of the Italian situation. In addition, some technical suggestions are provided concerning some of those areas for which a community agreement has yet to be reached. In other cases, the technical suggestions formulated by the Indicators Subgroup of the Social Protection Committee even where these have yet to be formalised by the European Council have been followed. With regard to policies, the data published in the Monitoring Report prepared by the Italian Ministry of Labour and Social Policies at the beginning of the year 4 was reviewed and updated in order to present an overview of social protection expenditure and the categories eligible for meanstested social security benefits. A brief overview of the demographic situation of the country is provided as a premise. 2 The most recent Report on Policies Against Poverty and Social Exclusion is that of 2001. The current Commission s updated report should be available in the next few months. 3 The social indicators defined at a community level are 18, divided between primary and secondary indicators, and were adopted by the European Council in Laeken at the end of 2001. These indicators are distributed in this paper by area of reference (see Table of Contents). 4 See chap. 7 on social expenditure and Box 19 on the ISEE Information System records included in the 2003 issue of the above-mentioned Report. 5
Overview: current demographic changes 0.1 Italian Population The composition of the Italian population in terms of age groups is undergoing significant changes. A reduction in fertility (see par. 0.2) and an increase in life expectancy (see par. 7.1) are at the root of this well-known process of gradual ageing of the population. Table 0.1a shows how this process is today more evident in the central-northern area of the country, where over one-fifth of the population (one-sixth in the south and islands) is over 65; in the centre-north, the elderly are one and a half times the children (age 0-14), while in the south old and new generations still balance out. Tab. 0.1a Structural indicators for the Italian population at 1 January 2003 by geographical area (in percentage) Population by age group % age 0-14 % age 15-64 % age 65 + Old-age index (a) Totally dependent persons (b) Totally dependent elderly persons (c) North 12.8 67.0 20.2 158 49 30 Centre 13.1 66.5 20.4 155 50 31 South + Isl. 16.7 66.8 16.5 99 50 25 ITALY 14.3 66.8 18.9 133 50 28 Source: Istat, Census of resident population by gender, year of birth and marital status Notes: (a) Population aged over 65 / 0-14 per 100 (b) Population aged 0-14 and over 65 / 15-64 per 100 (c) Population aged over 65 / 15-64 per 100 Tab. 0.1b Evolution of selected structural indicators for the Italian population (in percentage) Totally Totally Population by age group Old-age dependent dependent index persons elderly % age 0-14 % age 15-64 % age 65 + (a) (b) persons (c) 1951(d) 26.1 65.7 8.2 31 52 13 1971 24.5 64.4 11.0 45 55 17 1991 16.3 68.6 15.1 93 46 22 2001 14.4 67.4 18.3 127 48 27 2010 (e) 14.1 65.3 20.6 146 53 32 2030 (e) 11.6 60.4 28.0 242 66 46 2050 (e) 11.4 54.2 34.4 301 85 64 Source: Istat, Census of resident population by gender, year of birth and marital status Notes: (a), (b) and (c) see Tab. 0.1a (d) data at 31 December for 1951 and at 1st January for the following years (e) Forecasts, central tendency. However, going beyond geographic differences, what is most striking are the population changes over time (cf. Tab. 0.1b); only half a century ago, elderly persons only comprised one-third of the number of children, while it is estimated that by 2050 they will be three times that number. The elderly dependency index (the elderly with respect to the working-age population), which has 6
already more than doubled in the last fifty years, is set to increase at an even greater rate in the next fifty, and according to forecasts could reach proportions close to two-thirds by 2051. Fig. 0.1 and table 0.1c the first of which shows a greater degree of detail in terms of age groups while the second highlights details according to macro-areas show how in the next few years (2010), the age groups between 40 and 64 years old comprising mature individuals who are getting closer to retirement, while current pension laws still apply are destined to grow in weight both in absolute and in relative terms. Among the elderly, the increase both in absolute and in relative terms - in the number of very old people, would already be noteworthy in itself. It should be noted the differences between territorial macro-areas are set to reduce already in the next few years, owing to an acceleration in the ageing of the population also in the south of the Italy. Fig. 0.1 Italian population pyramid at 1 January 2001 and forecast (central tendency) at 1 January 2010 90 + 85-89 80-84 75-79 70-74 65-69 60-64 55-59 Female Male Age group 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 5 4 3 2 1 0 1 2 3 4 5 Percentage 2010 2001 Source: Istat 7
Tab. 0.1c Absolute variation in the population in the decade 2001-2010 by age groups and geographical area (thousands) age 0-14 age 15-24 age 25-54 age 55-64 age 65-74 age 75 + Total North 143-285 -340 131 176 626 450 Centre 40-131 -84 90 42 251 207 South + Isl. -237-397 -81 364-7 421 63 ITALY -54-813 -506 584 211 1298 721 Source: Istat, Census of resident population by gender, year of birth and marital status Notes: (a) Population at 2010 based on population central tendency forecast. Tab. 0.1d Resident population at 1 January 2001 (thousands) age 0-14 age 15-24 age 25-54 age 55-64 age 65-74 age 75 + Total North 3246 1453 3604 2545 1164 2893 14906 Centre 11732 4961 8934 3262 1375 2120 32383 South + Isl. 2786 1212 1907 2264 995 1393 10556 ITALY 17763 7626 14445 8071 3533 6405 57844 Source: Istat, Census of resident population by gender, year of birth and marital status 0.2 Fertility As mentioned, the current ageing process of the population derives both from an improvement in life expectancy (at the moment of birth and at advanced ages) and which will be further discussed in chapter 7 (cf. Fig. 7.1) and from a lower birth rate. In 2002, the birth rate for women of childbearing age was estimated at 1.26. As can be seen from Fig. 0.2a, the total fertility rate has dropped significantly since the second half of the sixties (the peak had been of 2.7 children per woman in 1964) and particularly since the end of the seventies. The lowest rate was hit in 1995 (1.19 children per woman), after which a slow but constant rise has been observed. Fig. 0.2a also shows the total fertility rate by generation 5, an indicator which is a more accurate representation of the basic trends in reproductive behaviour and therefore is less sensitive to the variations that affect year-by-year data. The drop in the fertility rate is evident here too, showing a lack of discontinuity and a longer-term, more linear tendency. For the generation of women born in 1965 (the 37-year-olds of 2002) a fertility of 1.43 children is estimated, and therefore a higher one than the transversal rate. This difference is mainly due to the rise in the average age of women at the birth of their first child, whereby there is a gradual recovery of fertility at a more mature age, an effect which has yet to become fully evident in the transversal measure. As is shown in Fig. 0.2b, the average of women having their first child has increased for all generations of women born after the second world war, rising from under 25 to over 27 for the most recent generations considered. 5 The Fig. shows the generation that had reached the average childbearing age for each calendar year. 8
Fig. 0.2a Total fertility rates by calendar year (1950-2002) and by generation (1920-1965) (values per 1000) 3000 2750 2500 2250 2000 1750 1500 1250 1000 Generazioni 750 Anno di calendario Generazione Source: Istat, Processing of regional fertility rates Fig. 0.2b Average age at the birth of first child for women born between 1933 and 1966 27. 27. 26. 26. 25. 25. 24. Source: Istat, Processing of regional fertility rate tables Generat io It should be noted that the reduction in the total fertility rate is not simply the result of changes in procreative choices; the fertility rates relative to the birth of a first child have not dropped drastically, although there has been an increase in the percentage of women who have chosen not to have children (18% for women born in 1963, cf. Fig. 0.2c). However, the choice as to whether to 9
have more than one child has changed significantly; the number of women having three or more children has basically halved, going from 40% for women born in 1920, to 20% for those born at the beginning of the 1960s. It is precisely this drop in the number of women having more than two children that is the main cause of the fall observed in the overall fertility rate. Less consistent, but nonetheless relevant, is the drop in the fertility rate relating to second children, so much so that in certain areas of Italy (especially the centre-north), one-child families are starting to become the prevalent family model. Fig. 0.2c Number of children had by generations of women born between 1920 and 1963 (percentage composition) 100% 90% 80% 3 or more children 70% 60% 50% 2 children 40% 30% 20% 1 child 10% 0% childless Source: Istat, Processing or regional fertility tables 0.3 Foreign Population With respect to the general situation described above, the peculiarity of the immigrant population 6 should be taken into account. Fig. 0.3 highlights the high share of immigrants among the younger groups in particular the 20 to 44 year olds; the panel (a) shows how with the gradual maturation of the migration process (from 1992 to 2002) the weight of children under four has increased, and a gradual shift towards older ages has taken place (which for the time being still only concerns age groups below 50 years of age). 6 The data given here refer to regular immigration (at least as regards presence on the national territory), as gleaned from valid permits of stay (Istat estimate of valid permits of stay net of those who in the meantime have left the national territory) and of persons registered with the register of births, deaths and marriages. In particular, the data does not include the about 700thousand regularization processes currently underway in accordance with law n. 189 of 2002. 10
Fig. 0.3 Structure of the foreign population currently holding regular permit of stay and resident by citizenship, by gender and age group, at 1 January - years 1992 and 2002 a) Pyramid of foreigners present by age - Years 1992 and 2002 b) Pyramid of Italians and foreigners by age - Year 2002 Age grous 90 e oltre 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 Age groups 90 e oltre 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 20-24 25-29 15-19 20-24 10-14 5-9 0-4 15-19 10-14 5-9 15 10 5 0 5 10 15 0-4 10 5 0 5 10 1992 2002 Italiani Stranieri Source: Istat, Processing of permit of stay data and estimates on register data The stock data (currently valid permits of stay, Tab. 0.3a) and flow data (registrations with register of births, deaths and marriages from abroad, Tab. 0.3b) highlight how the immigration phenomenon in Italy is characterized by a high level of dispersion in the countries and continents of origin. The first three countries Albania, Morocco e Rumania account for about one third of the migration flow 7, but for the rest arrivals from individual countries are of modest import. 7 In terms of stock, at the end of 2001, citizens of these three countries comprised 26.7% of the total permits of stay issued. 11
Tab. 0.3a Permits of stay by citizenship at 31.12.2001 (in percentage) Male Female Total EUROPE 37.6 44.7 40.9 Middle-eastern Europe 29.1 30.7 29.8 AFRICA 35.5 19.1 27.7 North Africa 25.0 11.1 18.4 Morocco 14.9 7.9 11.6 West Africa 8.6 4.8 6.8 East Africa 1.2 2.6 1.9 Central-southern Africa 0.7 0.6 0.6 ASIA 19.8 18.9 19.3 West Asia 1.6 0.9 1.2 Central-southern Asia 10.0 5.7 8.0 East Asia 8.2 12.3 10.1 AMERICA 7.0 17.1 11.8 North America 2.2 4.5 3.3 Central-southern America 4.8 12.6 8.5 OCEANIA 0.2 0.2 0.2 TOTAL 100.0 100.0 100.0 TOTAL (absolute values) 765,757 682,635 1,448,392 Source: Istat Tab. 0.3b Registered from abroad, by country of origin and destination. First 10 countries - Year 2000 (absolute values, composition in percentage and share in percentage of foreign citizens) Country of origin Number of persons registered from abroad Composition in percentage by citizenship of whom foreign Albania 32,229 14.2 99.2 Morocco 20,381 9 98.7 Rumania 19,803 8.7 98.1 Germany 10,081 4.4 25.5 China 9,461 4.2 97.2 Philippines 7,024 3.1 95.9 Switzerland 5,703 2.5 9.5 Peru 5,287 2.3 94.5 Yugoslavia 5,239 2.3 98 Poland 5,103 2.2 93.9 Total for first 10 countries 120,311 52.9 87.7 Source: Istat, Census of registrations and cancellations at the register of births, deaths and marriages owing to change of residence 0.4 Household Type This section examines the various household types that are prevalent in Italy today, highlighting differences between geographical areas and type of municipality of residence, as well as their evolution over time. Italian households are on average composed of 2.6 members, but in the south and islands this number goes up to about 3 people per household, on the one hand owing to a high proportion of very large households (comprising 5 or more members), two to three times higher 12
with respect to the rest of the country, and, on the other, to a lower number of single households (less of one in five compared with more than one in four in the centre-north) (cf. Tab. 0.4a and b). Various reasons can be found for these differences; in the south people tend to marry later (among 18-30-year olds, over 77% are unmarried in the south, against about 71% in the north) and in any case people tend to stay with their families for longer (people under 35 who have left their family of origin to live on their own in the south are only half with respect to the centre-north). Therefore, here single households tend to consist mostly of elderly people (in the south, 70% of singles are over sixty, compared to 60% in the centre-north), particularly women. Childless couples are much less frequent in the south, comprising a little over 20% of households of two or more people, while in the centre-north these reach 30%. Similar differences are found between the large municipalities covering central city areas where the average number of household members is lower and smaller but not very small town or suburban municipalities. Tab. 0.4c focuses on changes in the national total over the past decade. Among the various relevant trends, one which also goes to further clarify what was mentioned above regarding the singles phenomenon, is a growing tendency among mature individuals (between 25 and 54 years of age) to live alone, or live with other people without forming a traditional family nucleus, i.e. based on the presence of a couple. To confirm what was noted on the subject of fertility, there is also a marked fall in the number of persons under 44 who have children, while there is a growing share of persons remaining with their parents as adults 33.8% of 25 to 34 year olds fall under this category (against 20.2% in 1989-1990), as do 5.4% of 35 to 44 year olds (2.3% in 1989-90). At the same time, the import of the number of old-age pensioners who are part of households in which they remain in the role of parents is growing (from 16.7 to 20.7% of the total over the period considered). 13
Tab. 0.4a- Households and individual persons by type, region, geographical area and type of municipality Average - 2000-2001 (per 100 households in a same area) TERRITORY Singles (a) Singles over 60 years of age Households Families Households including with 5 or attached Couples Male Female Total more people or Childless with (b) (b) (b) members more than couples children (a) one family (d) (d) (a) (c) Single parents (d) Unmarried children age 18-30 (e) Average number of household members GEOGRAPHICAL AREAS North-west Italy 26.1 35.9 73.2 59.1 3.6 3.2 55.7 31.7 12.5 71.5 2.4 North-east Italy 24.8 36.2 74.1 60.1 5.7 6.3 57.3 30.6 12.1 70.4 2.5 Central Italy 25.8 39.9 70.4 59.2 5.8 6.7 57.3 30.3 12.4 74.9 2.5 Southern Italy 19.6 45.3 81.2 70.0 13.0 5.4 67.6 21.2 11.1 77.4 3.0 Italian islands 21.6 39.1 81.1 66.2 9.5 3.7 65.9 22.6 11.5 71.3 2.8 Italy 23.9 38.6 75.1 62.0 7.1 5.1 60.2 27.8 12.0 73.5 2.6 TYPE OF MUNICIPALITY Central city area 32.9 34.9 65.9 54.2 5.4 4.4 55.1 29.9 15.0 71.6 2.4 City suburbs 18.1 39.5 74.0 62.0 8.0 5.7 63.5 25.0 11.5 74.6 2.8 Less than 2,000 inhabitants 28.9 45.4 83.9 68.0 5.8 3.6 58.4 30.0 11.6 70.9 2.5 From 2,001 to 10,000 inhabitants 20.9 39.0 80.6 65.4 7.9 5.5 61.7 27.6 10.7 72.2 2.7 From 10,001 to 50,000 inhabitants 20.0 39.8 77.3 65.1 8.2 5.1 62.5 26.8 10.7 75.4 2.8 More than 50,001 inhabitants 26.6 38.6 75.2 62.2 6.3 5.1 57.4 29.1 13.5 74.2 2.5 Italy 23.9 38.6 75.1 62.0 7.1 5.1 60.2 27.8 12.0 73.5 2.6 (a) per 100 households - (b) per 100 singles - (c) households composed of one or more families or by a family with other persons attached (d) per 100 families - (e) per 100 young persons aged 18-30 Source: Istat, Multipurpose Survey Aspects of Everyday Life 14
Tab. 0.4b People over 15 by household type and geographical area (2000/2001 average) (per 100 persons over 15) AGE GROUP Households with no family nucleus Single person With other people, with no family nucleus Couples with children Member attached to Couples with children In single-parent family Childless couples Childless Single parent couples families As parent As child As parent As child North As spouse or partner Households with more than one family 15-24 1.1 0.9 0.2 0.3 0.0 1.4 81.7 0.1 11.0 2.0 1.4 100.0 25-34 7.9 1.7 0.4 0.5 0.1 26.9 32.2 1.1 8.9 17.7 2.6 100.0 35-44 8.3 1.2 0.2 0.5 0.2 63.6 5.5 3.6 4.6 11.0 1.3 100.0 45-54 6.9 1.4 0.2 0.2 0.2 69.1 1.0 5.0 2.5 12.3 1.4 100.0 55-64 9.9 2.0 0.3 0.2 0.3 46.2 0.2 6.0 1.1 31.7 2.0 100.0 65-74 22.2 3.1 1.4 0.5 0.5 19.2 0.0 6.3 0.5 44.6 1.8 100.0 75 + 37.7 5.1 5.2 2.6 1.2 7.7 0.0 6.8 0.0 32.0 1.7 100.0 Total 11.9 2.0 0.9 0.6 0.3 37.9 16.0 4.0 4.3 20.6 1.8 100.0 Centre 15-24 1.0 0.9 0.3 0.0 0.0 1.1 80.7 0.2 11.2 1.2 3.5 100.0 25-34 8.4 2.8 0.7 0.7 0.1 25.0 35.2 1.4 8.1 13.9 3.8 100.0 35-44 8.0 1.0 0.0 0.6 0.2 66.9 4.5 4.0 3.6 7.2 3.9 100.0 45-54 7.4 1.2 0.3 0.2 0.3 70.0 0.9 5.1 2.2 9.9 2.4 100.0 55-64 9.5 1.3 0.7 0.3 0.4 46.4 0.1 6.3 1.1 30.1 3.9 100.0 65-74 19.6 2.7 2.5 0.7 0.4 19.0 0.0 4.5 0.1 46.1 4.5 100.0 75 + 36.6 4.6 7.0 3.1 1.0 4.5 0.0 5.7 0.0 33.2 4.3 100.0 Total 11.7 2.0 1.3 0.7 0.3 37.2 16.6 3.8 3.9 18.7 3.7 100.0 South + Isl. 15-24 0.8 0.7 0.1 0.3 0.1 2.4 82.8 0.2 9.0 1.3 2.3 100.0 25-34 4.0 1.5 0.7 0.3 0.2 37.4 35.2 1.0 8.4 8.0 3.4 100.0 35-44 3.9 1.1 0.4 0.2 0.2 75.3 5.7 3.0 4.2 4.4 1.8 100.0 45-54 4.4 1.0 0.3 0.1 0.2 77.9 1.0 4.2 2.4 6.9 1.6 100.0 55-64 8.2 1.7 0.9 0.2 0.2 55.5 0.1 5.5 0.9 24.1 2.7 100.0 65-74 19.5 2.8 1.8 0.3 0.4 24.0 0.0 7.2 0.2 40.8 3.0 100.0 75 + 38.7 4.9 4.6 1.4 1.2 8.3 0.0 6.9 0.0 32.0 2.0 100.0 Total 8.4 1.6 0.9 0.3 0.3 43.3 21.4 3.4 4.3 13.5 2.4 100.0 Source: Istat, Multipurpose Survey Aspects of Everyday Life Total 15
Tab. 0.4c Persons over 15 by household and age group (1989/1990, 1993/1994, 2000/2001 average) (per 100 persons over 15) AGE Years Households with no family nucleus Member attached to In childless couples In couples with children In single-parent families Households Total GROUP Single person With other Couples Childless Single-parent As spouse or partner As parent As child As parent As child with more people, with no with couples family than one family nucleus children family 15-24 1989-1990 1.2 0.4 0.3 0.1 0.1 3.8 4.7 77.5 0.1 9.8 1.9 100.0 1993-1994 1.1 0.7 0.3 0.2 0.1 2.3 3.2 79.4 0.0 10.1 2.7 100.0 2000-2001 1.0 0.8 0.2 0.2 0.0 1.5 1.8 82.0 0.1 10.1 2.2 100.0 25-34 1989-1990 4.7 0.7 0.3 0.2 0.1 12.7 51.6 20.2 1.2 6.0 2.1 100.0 1993-1994 5.2 1.0 0.3 0.4 0.2 13.9 41.9 25.8 1.1 7.4 2.8 100.0 2000-2001 6.6 1.8 0.6 0.5 0.1 13.5 30.3 33.8 1.1 8.6 3.1 100.0 35-44 1989-1990 3.6 0.5 0.1 0.1 0.0 5.0 81.4 2.3 3.1 2.3 1.5 100.0 1993-1994 5.1 0.8 0.2 0.2 0.2 6.2 75.8 3.2 3.3 3.1 2.0 100.0 2000-2001 6.7 1.1 0.2 0.4 0.2 8.0 68.3 5.4 3.5 4.2 2.0 100.0 45-54 1989-1990 4.5 1.0 0.2 0.1 0.1 8.5 76.7 0.5 5.0 1.8 1.7 100.0 1993-1994 5.5 1.2 0.1 0.1 0.1 9.0 73.9 0.6 5.3 2.3 2.0 100.0 2000-2001 6.2 1.2 0.3 0.2 0.2 10.0 72.3 1.0 4.8 2.4 1.6 100.0 55-64 1989-1990 10.3 1.7 0.7 0.3 0.2 31.0 46.6 0.1 5.7 1.0 2.3 100.0 1993-1994 9.2 1.9 0.5 0.3 0.2 30.5 47.5 0.1 5.6 1.2 3.0 100.0 2000-2001 9.3 1.8 0.6 0.2 0.3 29.0 49.2 0.1 5.9 1.0 2.6 100.0 65-74 1989-1990 23.5 2.6 2.7 0.6 0.4 46.2 16.7-4.8 0.2 2.3 100.0 1993-1994 20.3 3.5 2.2 0.5 0.5 46.2 18.0-5.4 0.3 3.1 100.0 2000-2001 20.8 2.9 1.7 0.5 0.4 43.7 20.7-6.2 0.3 2.7 100.0 75+ 1989-1990 37.7 4.6 7.8 2.8 1.0 31.2 5.5-6.4-3.0 100.0 1993-1994 37.9 4.9 7.4 2.7 1.0 30.2 5.1-7.7-3.1 100.0 2000-2001 37.7 5.0 5.5 2.4 1.1 32.3 7.1-6.6-2.4 100.0 Total 1989-1990 8.7 1.3 1.0 0.4 0.2 16.2 43.7 19.4 3.2 3.8 2.0 100.0 1993-1994 9.1 1.6 1.0 0.5 0.2 17.0 41.3 19.1 3.5 4.2 2.6 100.0 2000-2001 10.6 1.9 1.0 0.5 0.3 17.8 39.7 18.0 3.8 4.2 2.4 100.0 Source: ISTAT, Multipurpose Surveys of Households 3rd and 4th cycle, years 1989, 1990; Aspects of Everyday Life, years 1993, 1994, 2000, 2001 16
I Economic Poverty 1.1 Risk of Poverty Economic poverty is typically analysed with reference either to the income or to the consumption of individual persons, taking into account by using equivalence scales their household type. Both measures are given here, in accordance with the EU practice, that identifies income as the relevant variable, and with the Italian national approach, which officially defines the poverty rate on the basis of consumption. As the community indicator is in any case dated the last survey referring to income for 1999 8 and is derived from a smaller sample 9, the Italian indicator, updated at 2002, will be considered first when looking at recent trends and in a more disaggregated analysis. The risk of poverty (Tab. 1.1.a) defined as the percentage of individuals whose consumption or, alternatively, net income is lower than a predetermined threshold is calculated according to different scales depending on the measure and methodology used: the EU indicator, based on income, highlights a poverty rate between 18 and 19%, while Italian national rate, which is consumption-based, falls between 12 and 14%. Conceptually speaking, consumption is perhaps a better measure of the (lack of) economic wealth, as it is more stable with respect to income fluctuations, which may derive from events of a temporary nature (e.g. job loss) 10, and is less subject to under-reporting, i.e. where the values declared are lower than the actual values. This, conversely, is typical for poorer categories at the tail-end of income distribution, as well as in contexts where there is a high rate of submerged employment, where there may be much reticence in declaring the real household income 11. In this light, it is understandable that the poverty rate calculated on consumption should prove to be lower, and might at the same time better reflect the actual situation. 8 It should be noted that according to the ECHP (European Community Household Panel, which was used for the income-based measure), the year of the survey is the one following the year or reference for the incomes. In the EU publications, the data shown refers to the year of the survey (e.g. 2000 for the latest available survey); here we have opted for providing the data with reference to the year of receipt of the income (1999, in the example) to provide consistency when comparing them with consumption data. 9 While the consumption survey referred to covers about 24,000 families and 70,000 individuals, the ECHP for Italy only takes into account 7,000 families and 21,000 individuals. 10 This applies given the use of equal methodologies. In reality, the difference between the EU and the Italian methodologies also involves factors linked to the statistical properties of the derived measure of distribution (of income or consumption) used in defining the poverty threshold: the median, typically used in the EU methodology, depends less with respect to the average (or mean) used in the Italian methodology, on variations at the tail-ends of distribution. 11 On the other hand, poverty rate calculated on the basis of income is a more neutral measure from the point of view of the choices made by individuals in terms of savings and consumption. In addition, from the point of view of data collection, and not considering the reticence phenomenon mentioned above, income data is generally easier to collect as it generally comprises few, easily aggregated, items than consumption data, which is fragmented in a jumble of individual purchases. In Measuring the well-being of the poor using income and consumption (NBER, working paper no. 9760, 2003), B. Meyer and J. Sullivan propose a systematic comparison, both theoretical and empirical (but in this case reference is made to the US case) of the two alternatives. 17
Tab. 1.1a Risk of poverty of individual persons - by gender, age group and geographical area. Variables of reference: income and consumption Years: 1998, 1999 (income) and 1999, 2001, 2002 (consumption) (in percentage) Income Consumption 1998 1999 1999 2001 2002 Gender Male 17.6 17.8 13.1 13.6 12.2 Female 18.4 19.0 13.2 13.7 12.6 Age group 0-15 22.2 25.0 16.1 17.3 15.4 16-24 24.9 24.8 14.8 15.5 14.1 25-49 16.9 17.8 11.7 12.1 11.0 50-64 15.8 15.4 10.0 10.6 9.1 65+ 14.5 13.2 16.1 15.8 15.4 Geog. area North 6.7 6.4 5.0 5.2 5.4 Centre 11.8 13.7 9.3 9.6 7.9 South + Isl. 34.7 35.1 25.1 26.2 23.6 Total 18.0 18.4 13.1 13.6 12.4 Source: Istat, European Household Panel, udb 1-7. Years 1999-2000, for income data; Istat, Survey of Family Consumption, for consumption data. Note: The shares of income and consumption are not comparable as they are calculated using different variables, samples and methodologies. See box 1.1. However, the difference in scale between the two indicators also depends on the methodology implemented, in particular the on definition of the poverty threshold and equivalence scales used. As is further explained in Box. 1.1, most of the difference in scale between the two indicators can indeed be ascribed to these other aspects, rather than to the variable (or sample source) per se. In any case, the indicator always refers to individual persons rather than to households 12 and is a relative value, depending on some kind of derived measure (the mean or median) of the distribution of income or consumption (for an analysis of absolute poverty, cf. par. 1.7). Beyond the different scales, both indicators show a similar pattern: the data show a reduction in poverty in 2002. The reduction in the risk of poverty in 2002, explained for the most part by the lowering in the relative poverty threshold (cf. par. 1.5), has brought the historical series down to its all-time low (since 1997, the first year for which a fully even series is available), highlighting a certain degree of procyclicity of relative poverty in Italy 13. 12 At the national level, the share of poverty is calculated in the first place with reference to households. Box 1.2 also shows data by household. 13 Relative poverty remained constant around 13% at the end of the 1990s, during three years (1997-99) of substantially stable economic growth (GDP growth rate around 2%). The rise in the risk of poverty for individuals to 13.9% in 2000, coincided with an acceleration in the growth of the GDP (3.1%), while the later reduction to the current rate of 12.4% was recorded in coincidence with the current phase of economic slowdown. 18
poverty is more concentrated in certain areas. In the south and islands, the poverty rate is about double the Italian national rate, while in the north it comprises a little over a third of it, regardless of which measure is employed 14 ; the share of poverty shows a peak value for children (cf. 5 below). The risk of poverty tends to decrease with age to then increase again if we consider consumption rather than income after 65 years of age 15. no substantial differences are noted between genders. However, we should take into account the fact that, assuming equal sharing of income and consumption within the household, women (men) receive by definition the same income of the person of the other gender with whom they live. Any differences in the aggregated datum basically depend on the share of poverty of men and women living alone. Box 1.1 Different methodologies for measuring the risk of poverty The indicators shown in Table 1.1.a do not only differ in terms of the variable chosen, but also in the definition of the poverty threshold and equivalence scale. The effect of using these different methodologies can be appreciated in table B1.1, below which the exact definitions of poverty threshold and equivalence scale are given depending on the methodology used. If we consider the total population, applying the EU methodology to consumption also, an increase of the poverty risk is observed with respect to the Italian national methodology, therefore bringing the consumption-based datum closer to that based on income (one percentage point less instead of more than five). 16 The remaining differences between this consumption-based indicator and that based on income, given equal methodologies used and therefore in both cases using thresholds and equivalence scales defined on the basis of the EU methodologies, derive from the difference in sources and in the variable as such. With regard to sources, the larger size of the sample for the consumption survey should be taken into account. As regards the variable, the question is more complex. In this regard, it should be pointed out that the income considered in the ECHP survey might overestimate the poverty phenomenon; the well-known reticence problem makes the assessment of income less reliable, particularly at the top 14 Regarding the regional cohesion aspects, the reader is referred to chapter 9. Here it should also be noted that the poverty threshold considers a single national value, not taking into account differences in the cost of living which are of a certain relevance, in particular as regards housing between small towns and large cities, and between different geographical areas. In chapter 3, the indicators of inequality within each area will be given. 15 In the case of persons over 65, the two indicators based on income and consumption respectively do appear to provide contrasting information; elderly people appear to be relatively poorer (wealthier) than the rest of the population on the basis of consumption (income), as was already highlighted in the Statistical Appendix to the National Strategy Report on Pensions 2002 (cf. par. 1.1 and Box 1.1). The difference, which in addition appears to be in contrast with what might be expected in the light of the theory on the life-cycle of savings, could derive from purely statistical problems or from a genuine stronger tendency towards saving, perhaps as a precautionary measure against possible shocks caused by one s health, or owing to a cohort effect which modifies the propensity to purchase certain commodities, for example technological innovations, on the part of the elderly. 16 It should be considered that a significant share of the population falls around the poverty threshold, therefore even small movements in this line for each given number of household members (by effect of the change of definition in the threshold itself or of the different equivalence scales used) have notable effects on the share of risk of poverty (cf. par. 1.4 below for the distribution of individuals around the poverty threshold). 19
and bottom end, with the consequence that part of the incomes classified as being below the poverty threshold, would, if correctly surveyed, be placed above it 17. In addition, the incomes calculated in the survey do not yet include (owing to problems linked to data collection) the rents owed by those who do not own their home, which it would be correct to do from a theoretical point of view and which may create a distortion in the estimation of the share of poverty. These empirical considerations are added to the basic fact that, in general, the risk of poverty assessed on the basis of consumption should in any case prove to be lower and more stable over time than that calculated on the basis of incomes, where part of the variations may be owed to temporary fluctuations rather than to permanent changes in income. Tab. B1.1 Risk of poverty different methodologies year 1999 Italy Consumption national methodology (a) 13.1 Consumption EU methodology (b) 17.3 Income EU methodology (b) 18.4 Source: ISTAT, ECHP, UDB 1-5, for income data, Survey of Household Consumption for consumption data. Notes: (a) The poverty threshold is defined for a household of two persons as being equal to the mean per capita consumption of the population. The equivalence scale used is the so-called Carbonaro scale, which takes into account only the number and not the age of the members, according to the following coefficients: 0.60 (1-member household), 1.00 (2 members.), 1.33 (3 members), 1.63 (4 members), 1.90 (5 members), 2.16 (6 members), 2.40 (7 or more members). (b) The poverty threshold is calculated as 60% of the median equivalised net income of the population. The equivalence scale used is that known as the modified OECD scale, that assigns the following weights: 1.0 to the first adult, 0.5 to other persons over 14 living in the household and 0.3 to persons under 14. The analysis of the poverty share by household type (Tab. 1.1b) shows how large families those including at least three children are those at the greatest risk of poverty. At the other end of the scale, the persons at the lowest risk of poverty are singles if we exclude old-age pensioners living alone and childless couples. The situation of single-parent families at least if the more statistically-reliable consumption data is to be believed does not appear to be particularly problematic, as opposed to their situation other countries where this type of family is considered a priority for the purposes of policies against poverty. Elderly persons living alone are poorer than the rest of the population, although their condition seems to be improving according to recent data. On the other hand, contrasting data is obtained concerning the poverty rate for couples where at least one person is an old-age pensioner, depending on whether an income-based or consumption-based survey is used. To confirm what was seen regarding the elderly as a whole, when consumption is considered these couples are relatively poorer with respect to the rest of the population. Conversely, when assessed 17 As mentioned, the problems with the reliability of income assessment are concentrated at both ends of the distribution, and therefore also concern higher incomes. However, in the measure in which the latter, even where not correctly estimated, exceed the median income, their underestimation should not affect the definition of the poverty threshold, nor, therefore, the calculation of the share of the risk of poverty. Less univocal is the understanding of what happens to the overall distribution of income. 20
on the basis of income, they present a risk of poverty that is significantly lower than that for the rest of the population. Tab. 1.1b Risk of poverty of individual persons by household type. Variables of reference: income and consumption years: 1998, 1999 (income) and 1999, 2001, 2002 (consumption) (in percentage) Income Consumption 1998 1999 1999 2001 2002 2 adults with 1 child 11.7 14.2 7.3 9.0 6.8 2 adults with 2 children 14.6 20.8 13.8 14.1 12.5 2 adults with 3 or + children 34.9 35.7 25.2 25.4 22.6 Single parent with children. 28.0 * 9.1 12.2 10.3 Other household types 28.0 25.3 19.9 20.2 19.2 2 adults (at least 1 aged 65 +) 9.9 9.2 16.3 16.0 15.4 2 adults (both under 65) 10.1 9.3 5.5 5.6 5.4 Single person under 30..... Single persons 30-64 years 12.7 13.1 * 3.3 3.5 3.3 Single person over 65 23.0 24.0 15.4 13.5 13.3 Other household types 15.4 13.6 12.4 13.5 12.5 Total 18.0 18.4 13.1 13.6. 12.4 Source: Istat, European Household Panel, udb 1-7. years 1999-2000, for income data; Istat, Survey of Household Consumption, for consumption data. Notes:. indicates data cannot be published owing to insufficient sample (lower than 20); * indicates poor reliability (sample between 20 and 50). with dependent children without children Tab. 1.1c highlights the high impact of employment, or better, of unemployment, on the risk of poverty. Persons seeking employment are those which are most likely to live in households at risk of poverty. About half of those that have been unemployed for more than six months in the year of reference more than two and a half times the aggregated rate 18 live in households with an income below the poverty threshold. The poverty share is also high among the inactive population (not retired from work). Conversely, people in employment have a poverty rate which is significantly lower than the aggregated rate. The different conditions of poverty of the various subgroups by individual characteristics, participation in employment (individual and by household) and type of employment will in any case be analysed more in depth in chapter 4. 19 18 The same order of magnitude in the distance between the aggregated datum and that for the unemployed is obtained if the professional status considered is that of the household reference person (in the sense of registered head of the family), adopting the national, consumption-based methodology and considering the incidence per household (cf. Box 1.2 below). In this case the professional status is that declared at the moment of the survey and not, as is the case with the ECHP survey, that relating to single months of the year preceding the survey, which is that of reference for income. 19 Persons who have retired from work, in the case of the income-based survey, appear to be relatively wealthier with respect to the aggregated rate. No comparable datum based on consumption is available based, as in this case data relating to professional status for the previous year was not collected. In any case, on the basis of the survey on consumption, households for which the reference person is retired (cf. Tab. B1.2) are relatively poorer than others, in parallel to what was recorded in the analysis of poverty by age group and household type with reference to the position of elderly persons. 21
Tab. 1.1c Risk of poverty by most frequent activity. Variable of reference: income Years: 1998, 1999 (in percentage) 1998 1999 Employed 6.8 7.6 Self-employed 16.5 16.3 Unemployed 49.3 49.1 Retired 11.8 10.8 Inactive - other 25.0 26.0 Total 18.0 18.4 Source: Istat, European Household Panel, udb 1-7. years 1999-2000 Notes: Most frequent activity as defined by having spent at least seven months of the year of reference in one status Tab. 1.1d Risk of poverty rate by tenure status. Variables of reference: income and consumption Years: 1998, 1999 (income) e 1999, 2001, 2002 (consumption) (in percentage) Income Consumption 1998 1999 1999 2001 2002 Own-home or life tenancy 15.6 15.2 Rent-free or 11.2 11.2 10.0 accommodation provided 24.7 26.2 Tenancy or subtenancy 23.7 26.0 30.1 21.5 24.5 Total 18.0 18.4 13.1 13.6 12.4 Source: Istat, European Household Panel, udb 1-7. years 1999-2000, for income data; Istat, Survey of Household Consumption, for consumption data. The poverty share of tenants is about double that of home-owners (Tab. 1.1d). Tenants also seem to encounter growing difficulties over time. The different definitions of poverty assessed till now in terms of risk (percentage of poor individuals in a given condition of the total of persons in that condition), are given in terms of shares of the total of the poor population in table 1.1e 20. The joint analysis of the risk of poverty rate and its composition nonetheless allows the definition of priority targets for policies against poverty: the south of Italy and islands, families with more than one dependent child and the jobless (unemployed and inactive for reasons other than retirement), also noting the need for integrated strategies and differentiated tools such as development, family support and employment policies. 20 This datum is interesting because the groups at the greatest risk of poverty do not always comprise the highest share of persons below the poverty line and vice-versa. This for example is the case for employed persons who, although having a very low risk of poverty with respect to the unemployed, comprise a similar percentage of the population at risk of poverty. Another example, which should however be assessed with caution owing to the low sample, is that of those living in single-parent families, which present a high poverty rate (based on income), but comprise less than 2% of persons at risk of poverty. As regards tenure status, home-owners at risk of poverty are more than double with respect to tenants, although the poverty rate for home-owners is half with respect to that for tenants. These cases are hardly surprising if we consider that the groups in question have a different distribution among the population (the poverty rate for one group may be low, but if that group is highly represented in the total population it will tend to be strongly represented even among those at risk of poverty). 22
Tab. 1.1e Distribution of persons at risk of poverty by different characteristics. Variables of reference: income and consumption Years: 1999 (income) and 2002 (consumption) (in percentage) Income 1999 Consumption 2002 At risk of poverty Total At risk of poverty Total GENDER Male 49.1 50.1 47.9 48.6 Female 50.9 49.9 52.1 51.4 AGE GROUP 0-15 26.2 19.2 19.2 15.4 16-24 16.5 13.1 11.6 10.2 25-49 36.4 38.2 32.9 37.3 50-64 14.8 18.6 13.9 19.0 65+ 6.1 10.9 22.4 18.1 AREA North 15.1 43.1 19.4 44.6 Centre 14.8 20.0 12.2 19.3 South + Isl. 70.1 36.9 68.4 36.1 HOUSEHOLD TYPE Single person under 30. 0.4. 0.5 Single person aged 30-64 1.9* 2.6 1.0 3.8 Single person over 65 5.6 4.3 5.9 5.5 2 adults (at least one person over 65) without dependent children 4.6 9.1 13.1 10.6 2 adults (both under 65) without dependent children 3.2 6.3 3.6 8.4 Other household types without dependent children 18.1 24.6 20.7 20.5 Single parent with dependent children 1.7* 1.1 1.8 2.1 2 adults with 1 dependent child 8.3 10.8 7.0 12.7 2 adults with 2 dependent children 18.2 16.1 18.5 18.4 2 adults with 3 or more dependent children 13.9 7.2 9.3 5.1 Other household types with dependent children 23.7 17.3 19.0 12.3 No data available.. MOST FREQUENT ACTIVITY Employed 17.7 35.0 Self-employed 10.9 11.3 Unemployed 19.9 7.6 Retired 9.1 16.9 Inactive - other 42.4 29.2 No data available.. TENURE STATUS Home-owner 62.9 76.5 Free tenancy 8.2 5.8 66.7 82.5 Tenancy 28.9 17.7 33.3 17.5 TOTAL 100.0 100.0 100.0 100.0 Source: Istat, European Household Panel, udb 1-7. years 1999-2000, for income data; Istat, Survey of Household Consumption, for consumption data. Notes: Most frequent activity not available for consumption data 23
Box 1.2 Risk of poverty of households The analysis of the risk of poverty has up to now been conducted at an individual level. However, it should be noted that, regardless of whether the income or consumption variable of reference is used, the identification of persons at risk of poverty is made on the basis of the characteristics by household of the variable in question (overall income or consumption by household, equivalised in order to make the different household situations comparable). Although the analysis is conducted at an individual level, the characteristic surveyed the risk of poverty is therefore a household variable. Therefore, rather than speaking of persons at risk of poverty, it would be more appropriate to speak of persons living in households at risk of poverty. For these reasons, the poverty phenomenon could also be directly analysed as the share of households at risk of poverty of total households, which is also the national practice in Italy. Obviously, this practice has a counter-indication where the objective is an international comparison: the comparison between the share of poverty of households of different countries is partially distorted owing to the different household types, whereby, for example, given an equal number of individuals below the poverty line, there will be a higher poverty rate of households where households have a lower number of members. This is another reason why, as well as in order to give consistency with the EU indicator, the decision was taken to keep the analysis at an individual level. In this Box, in any case, the share for households is given, therefore focusing on family characteristics and household reference persons (in the sense of the registered head of family). It should be noted how the overall poverty share is lower for households than it is for individuals. This is an obvious consequence of the fact that the risk of poverty for large families is very high, more than double the aggregated datum. Generally speaking, the picture given in the main document is in any case confirmed; poverty is a phenomenon mostly concentrated among the households of the south of Italy, large families, families with at least two underage children and those where the head of family is unemployed. These being consumption-based surveys, as we have seen households that include elderly persons are particularly at risk of poverty. In the table the level of education of the household reference person is also considered, a variable not taken into account till now. The acquisition of a higher education diploma on the part of the household reference person significantly reduces the risk of poverty of his/her family, down to values lower than 4%. 24