From Citizenship Income to Training and Employment Support, including the Workers' Employability Guarantee Program, in recent years Italy has often diverted part of its public spending toward active labor market policies, with the aim of solving the problem of unemployment. This approach, however, has not yet borne fruit, and has often been detrimental to income support policies.

Index

The Citizen's Income budget

The Citizen's Income, introduced through the 2019 budget law, focused on making beneficiaries more employable and therefore more employable, working to improve the matching of supply and demand through the public employment services system. Consequently , it was primarily an "active labor market policy measure" (Chamber of Deputies 2022, 10), and for this reason the ISEE threshold for obtaining it was set at €9.360,00 per year, well above the poverty threshold typically used as a reference for measures to combat poverty, albeit with several very stringent constraints relating to income and assets (Ministry of Labor and Social Policies 2019).

Everything you need to know about citizen's income
Everything you need to know about citizen's income

The contribution was defined based on the difference between the access Income Situation Indicator and the income component of the ISR of the household, up to a maximum of approximately €535,00 per month. The latter, in fact, amounted to €780,00 per month for a single person with no other income, or six-tenths of the median equivalized family income, which is based on the European at-risk-of-poverty threshold (Ranci Ortigosa 2018). This indicator is set at the EU level at 60% of the national median equivalized disposable income, which corresponds to the total disposable income of each household (i.e., the sum of all monetary income of each member and the income earned at the household level, excluding taxes and social contributions paid) divided by the equivalent number of its members, determined according to a standard equivalence scale that assigns a statistical weight to each member (Eurostat 2021).

Evaluate the success of the measure

To assess the success of the measure, we can consider the data relating to the program's take-up, defined as "the percentage of recipients of the measure compared to the group of beneficiaries eligible for the benefit" (De Carlo 2020 , 244). This is a fairly low parameter, which fluctuated between 61,3% in 2019 and 73,4% in 2020, while from the second half of 2021 onwards, there was a decline that brought the numbers back to those of 2019, until further decreasing for 2022, where the 1,6 million beneficiary households in June 2021 fell to 1,4 million in December 2022, and 1,2 million in April 2023 (INPS 2023).

To explain the lack of success of the benefit, several hypotheses have been put forward, primarily related to the requirements for receiving it. First and foremost, the use of the poverty risk parameter, which, as Eurostat (2021, 1) explains, "does not measure wealth or poverty, but rather low income compared to other residents in the country, which does not necessarily imply a low standard of living."

Critical issues

Furthermore, the fact that the contribution included a set of requirements based mainly on different and independent asset thresholds for the real estate and financial components shifted the target of beneficiaries more towards people with low assets than towards those with low income, effectively confirming the secondary nature of combating poverty among the objectives (Di Nicola 2019).

A further critical issue was found in the equivalence scale applied to the family unit, according to which the beneficiary was worth one percentage point, to which 0.4 points were added for each additional adult member and 0.2 points for each minor. This calculation method made it unlikely that a large family would meet the requirement of an equivalent income of no more than €6 per year , and in any case, the amount paid decreased as the equivalent income and therefore the number of family members increased (Di Nicola 2020). Considering that poverty affects large families much more than small families, it is clear that a contribution designed in this way would have little impact on families that would have had greater need for it.

The transition towards new active labor market policies

The 2023 budget law established a one-year limit on the enjoyment of the Citizen's Income (CIT) to seven months, except for households with disabilities, minors, people over sixty, or those dependent on social services because they cannot find work. This is with a view to completely eliminating the benefit starting January 7, 2024 (Sacchi et al. 2023). Those not eligible for the exemption were redirected to the newly created Support for Training and Work program, aimed at family members aged between 18 and 59 with an ISEE (Income and Social Security) value not exceeding €6 per year (along with certain financial constraints).

The goal is to activate people at risk of exclusion into the workforce through participation in training, professional qualification and requalification projects, orientation, job placement, and active policies (Dagnino 2023). From this perspective, it builds on the same foundations as the Workers' Employability Guarantee plan envisioned as part of the National Recovery and Resilience Plan (NRRP) for the five-year period 2021-2025, which envisions reaching at least 3 million beneficiaries (75% of whom are women, the long-term unemployed, people with disabilities, young people under 30, and workers over 55) by 2025, of which at least 800 will be involved in training activities (Anpal 2021).

Active labor market policies: support for training

Given the recent implementation of the Support for Training and Work , we currently don't have enough data to assess its true effectiveness. It's significant, however, that based on data presented in January by the Ministry of Labor, only a third of the applications submitted were accepted, or just 55 out of 155. This figure also highlights the measure's lack of take-up: the potential recipients of the Citizen's Income were 249. It should be noted, however, that by virtue of its characteristics and targets, the SFL is not a minimum income measure, but rather an active labor market policy measure, and this could explain why it hasn't been able to replace the Citizen's Income.

The fact remains, however, that even from this last point of view, it has not managed to achieve satisfactory results. Considering national data relating to the aforementioned GOL Program , in fact, in the first half of 2023, only 44,7% of those supported by the Employment Centers had been offered or initiated an active policy, while at the regional level, only seven Regions had above 50% of those supported and beneficiaries of a proposed or initiated activity (Valente 2023).

How to achieve satisfactory labor policies?

At this point, therefore, the question arises spontaneously : how can we achieve satisfactory labor policies? The president of the National Institute for Public Policies provides an answer. Commenting on Italian employment figures, he notes that there has been growth in youth and female employment over the past two years, but this growth is occurring at a slower pace than would be possible if we were able to meet the needs of the current labor market (Forlani, 2024).

active labor policies
learn more with – Active Policies: Youth Guarantee and New Perspectives

More specifically, the sociologist identifies three pillars for intervention: increasing the employment rate of working-age people, increasing the share of highly skilled workers, and increasing the number of those specialized in new technologies. In particular, the labor policy expert emphasizes the need to adapt the skills of workers in transition to those required by companies through training programs.

For this to happen, however, it is first necessary to address the access to career services, which must be facilitated, and to strengthen the mechanism linking the economic benefits associated with protection for involuntary job loss to the conditions attached to them. In other words, beneficiaries must be incentivized to accept any job offer consistent with their professional profile, which should then emerge strengthened and, consequently, sought after.

Andrea Gruttad'Auria

References

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