A regime approach
A regime approach
Abstract and Keywords
This chapter develops the theoretical framework within which Italian poverty characteristics and drivers should be understood, in a European comparative perspective. Following Polanyi’s approach, it argues that poverty is the outcome of modes of regulation of social processes that, on one hand, shape the system of opportunities and disadvantages, and, on the other, expose specific social groups to the risk of poverty. These modes of regulation are historically rooted and involve economic processes, family and social forms of solidarities, gender arrangements and cultural norms and representations. Based on various indicators, the chapter delineates five types of poverty regimes within the EU, which differ both in levels and intensity of poverty and in the specific dimensions of vulnerability.
Poverty is the outcome of modes of regulation of social processes that, on the one hand, shape the system of opportunities and disadvantages, and on the other, construct some social groups as disadvantaged. As summed up by Brady (2006: 154), ‘macro-level labour market and demographic conditions put people at risk of poverty. … Structural theory is a compositional type of explanation: the more people in vulnerable demographic or labour market circumstances, the more poverty there is. The concept of structure refers to the set of labour market opportunities and/or demographic propensities that characterize the population’s likelihood of being poor.’1 These modes of regulation are rooted in the specific history of a country, although they have adapted to the changing circumstances. They involve economic processes, but also forms of family and social solidarity, systems of social protection, and cultural norms and representations.
This is what is meant here by the concept of poverty regime: a specific combination of labour market conditions, the balance between public and private (family) responsibility in buffering against social risks, a gender division of labour within families and within society, and (gendered) social norms and cultural values. The incidence of poverty, its composition and how it is experienced by those concerned depend on the peculiar combination and interaction of these factors in a given context and in a given historical period.
In societies characterised by different balances of regulative institutions, the sub-groups mostly affected by the risk of impoverishment may differ. For instance, in 2017, the risk of poverty was 20.3% in Italy and 12.4% in Denmark. However, in the case of families with three or more children, the difference was much greater: 37.1% in Italy and 8.9% in Denmark (Eurostat online database). Generally in Italy, households with dependent children have a higher risk of poverty than childless households (24.8% against 16.2%), while in Denmark the reverse is true (8.3% against 15.9%). In Denmark, the highest risk of poverty (33.4%) concerns adults aged under 65 who live alone, a figure that amounts to ‘only’ 25.9% in Italy. The overall economic situation of the two countries may explain the difference in the incidence of poverty in the general population, but the degree to which there is a differential risk between households with and without dependent children (particularly when (p.2) large), as well as the higher risk of poverty among individuals living alone in Denmark, certainly has to do with differences in patterns of women’s labour force participation, age on exiting the parental household and divorce rates. Moreover, these differences depend in turn not only on cultural models concerning the ‘proper’ gender division of labour or the ‘proper’ age for exiting the parental household and becoming economically independent; they also depend on, and interact with, differences in frameworks for work− family reconciliation policies, gender equality policies, housing policies, and forms of income support for parents with children. What is at issue here are ‘institutional complementarities’ (Amable, 2016) across different domains.
In other words, it is true that in developed countries poverty is mainly determined by employment patterns, on the one hand, and social expenditure patterns, on the other (Gábos et al, 2019). Employment patterns, however, are determined not only by the structure of demand and of the economy, but also by the gender division of labour within households, which greatly affects the so-called work intensity of a given household – an indicator that has proven crucial in assessing poverty risk at the household level. In turn, these factors are also determined by the explicit and implicit assumptions that shape both the organisation of market labour and the structure of welfare state arrangements and fiscal policies − as a large body of literature has shown (see, for example, Orloff, 1993; Hobson, 1994; Lister, 1994; Lewis, 2001; Saraceno, 2010; Saraceno and Keck, 2010). Similarly, intergenerational obligations are shaped not only by gender and by family culture, but also by actual welfare state arrangements (or lack thereof). In an increasing number of countries, foreigners − and particularly economic migrants and asylum-seekers − have become a specific risk group because they often lack the informal resources and social capital available to the natives, are often located at the bottom of the occupational stratification and may have legally restricted access to the some welfare benefits. The native/foreigner gap for risk of poverty is present everywhere but to different degrees, depending not only on foreigners’ overall incidence in the population and on their specific characteristics in terms of education and skills, but also on national migration and social integration policies. Within the European Union (EU) as a whole, the risk of poverty and social exclusion (AROPE) for foreign-born residents is 39.2% compared to 21.6% for natives. In Italy, the number of foreigners at risk is particularly high, at 55%.
Finally, the size of the informal economy in a given country should not be underestimated, either as a resource or as a trap. In fact, the informal economy, as a secondary labour market, provides income opportunities for those who are not successful in entering the formal labour market, or who wish to integrate formal, taxable income with informal earnings. By definition, however, the informal economy does not grant access to the social protection measures targeted at formal workers: entitlement to a labour (p.3) contract, unemployment and accident indemnity, contributory pensions, even health services in some countries. The larger the informal economy sector, the larger the share of the population at risk of both low wages and unprotected unemployment – a characteristic that is typical of many developing countries, but also of the poorer regions of the Mediterranean countries, such as Italy’s Mezzogiorno (the South) (Lucifora, 2019).
An analytical framework
The concepts of modes of regulation and regulative institutions are based on Polanyi’s (1944) theory of distinctive forms of integration of the economy in society. As is well known, Polanyi distinguishes between three pure forms of integration, that is, the principles that regulate the distribution of valuable resources within a given society: reciprocity, redistribution and market exchange. According to Polanyi, every society has a combination of the three principles, with variations based on the relative prevalence of one principle over the other two. What is of special interest here is the fact that societies also vary according to the institutional forms that the three principles assume.
In general terms, all Western European countries2 belong to a similar model of social regulation called ‘welfare capitalism’ (Marshall, 1950; Esping-Andersen, 1990). Developed after the Second World War, this model includes a combination of market economy, government or state power to regulate economic forces, public welfare provision, the family as a crucial locus of reciprocity-based redistribution of income and care (based on the gender division of paid and unpaid work), and last but not least, democracy as the form of government (see, for example, Dahrendorf, 1959). However, all these elements develop into different institutional arrangements in the individual European countries, shaping specific modes of regulation within the general model.
The existence of systemic differences within an apparently similar model of regulation was first pointed out by Esping-Andersen (1990). His concept of the welfare regime as a specific combination of redistribution, reciprocity and market exchanges in meeting individual needs was clearly indebted to Polanyi’s three modes of exchange and to Richard Titmuss’ (1958) typology developed some 30 years earlier. The issue of the diversity of modes of regulation with regard to the market is instead at the core of the varieties of capitalism literature (see, for example, Hall and Soskice, 2001; the revised version in Beramendi et al, 2015; and Jahn, 2018, for their redistributive impact). But neither Esping-Andersen nor Hall and others address the issue of the consequences of these different modes of regulation for poverty and the characteristics of the poor. Focusing in particular on the efficacity of the different welfare regimes in combating poverty, Leibfried (1993) integrated (p.4) Esping-Andersen’s threefold welfare state typology with a fourth type he called Latin rim (what other authors would call Mediterranean) as a specific, not residual, type of welfare regime, characterised by the central role assigned to family solidarity in supporting the poor.
Gallie and Paugam (2000) develop a classification of ‘unemployment welfare regimes’ that is useful for understanding the role of patterns of unemployment protection in buffering against poverty. The classification is based on three criteria: coverage, level of compensation and expenditure on active employment policies. They distinguish four models: sub-protective, liberal/minimal, employment-centred and universalistic. They underline the fact that the ‘sub-protective’ Italian system of income support for unemployment was at the time characterised by a very strong dualisation between unemployed workers from large firms, often not officially classified as such in the national statistics (since, under the Extraordinary Wage Guarantee Fund (WGF) [Cassa Integrazione Straordinaria] they might still be formally employed), and young unemployed people with no previous job, who do not receive any benefit.3 With a similar approach, Gough (2001) has developed a typology of eight social assistance regimes, based on the extent, programme structure and generosity of the social assistance system.
From a partially different perspective, an important step towards the conceptualisation of poverty regimes is Paugam’s (2005) categorisation of the ‘elementary forms of poverty’: integrated, marginal and disqualifying. This classification is based on a Durkheimian-inspired typology of social bonds – lineal (intergenerational), elective participation, organic participation and citizenship − and their specific regulation in different societies (see also Paugam, 2008, 2017). These four kinds of bonds are, in fact, articulated and implemented in different ways and with a different intensity across countries. Thus, the intensity of intergenerational bonds and the related expected obligations differ both between Nordic and Southern European countries and on whether upward or downward (lineal) relations are involved. Elective bonds (between partners, friends or selective acquaintances) gain importance in countries and social groups where the family is not the exclusive or main reference group. Organic participation bonds are dependent on the strength and reliability of intermediate institutions, such as trade unions or professional associations. Citizenship-based bonds have a historically different weight across countries, based on the degree of establishment and extension of citizenship rights. Differences in the combination of these four kinds of bonds result from the distinct way each of them is played out in a given country and how they interact with each other. In this perspective, according to Paugam, one can speak of an ‘organic familistic’ social bonds regime in Southern European countries and in poor countries elsewhere, of an ‘organic public’ system in the Nordic countries, of an ‘organic elective’ (p.5) system in the Anglo-Saxon countries and of a ‘organic plurisolidaristic’ regime in the Continental countries.
Paugam underlines that this typology of attachment regimes should not be confused with the typology of welfare regimes, however similar they may sometimes seem. Even if the former, as the latter, takes the dimension of decommodification as the central element of all institutionalised forms of social protection, Paugam still systematically underlines the normative intertwining of several types of social bonds as the decisive factor in the integration of each individual into society and in the integration of society as a whole. With regard to poverty, the organic familistic regime, which characterises societies (developing countries, but also the poorer regions of the Southern European countries, including the Italian Mezzogiorno) with a weak formal labour market, limited welfare state provisions and a diffuse informal economy, strongly encourages family solidarity in the face of poverty. This regime, therefore, produces an integrated kind of poverty, meaning that poverty, being shared by a large part of the community and supported by family solidarity, does not cause stigmatisation and social exclusion.
At the opposite end of the spectrum, the organic public regime, based on individual citizenship rights and a broad, well-regulated formal labour market with high or decent wages, reduces the need for extensive family solidarity. Poverty is a marginal experience met by publicly provided support under conditions of social control.
Both the organic elective and organic plurisolidaristic regimes favour instead what Paugam defines as disqualifying poverty, that is, poverty experienced as a personal, individual failure. The former regime tries to compensate comparatively weak public protection and reduced family solidarity with engagement in solidaristic associations and groups (including ethnic communities), but the residuality of social assistance has strong stigmatisation effects. As for the organic plurisolidaristic regime, although it mobilises all four kinds of bonds, it does not define a clear hierarchy of responsibility, thus creating normative uncertainty and unforeseen oscillations, with a resulting weakening of overall solidarity and an uncertain status of the poor and of their rights and expectations.
What interests Paugam, therefore, is neither counting the poor nor identifying specific ‘risk groups’ but, given the different articulation of social bonds, ascertaining what makes a poor person poor in a given society. Taking up Simmel’s (1906) idea that poverty is first and foremost a social construction, Paugam’s focus is on the way in which the poor are represented, how they are recognised and acknowledged as such, what relationships they have with the social protection system, and therefore what their context-specific experience ‘as poor’ is in societies and time periods characterised by different social bonds regimes. In his conceptual framework, (extended) (p.6) family ties play an important role, but the gender structure of family exchanges is virtually ignored with regard both to the gender-related content of the exchanges (for example, money versus care) and the gender-specific poverty risks it generates (such as reduced employment opportunities for women overburdened by caring and domestic work).
Furthermore, the concept of organic familistic regime (and particularly of integrated poverty) tends to underestimate not only the higher risks of isolation and lack of any kind of protection, which, in these contexts, affect those who for some reason cannot count on their family. It also underestimates the vicious circle these solidaristic expectations may set in place, constraining the possibilities of an individual or a household to exit poverty. The mandate of reciprocity and constant redistribution within the solidarity network may inhibit saving, or moving on, or taking a chance to invest in oneself or one’s own household. This risk was well described some decades ago by an anthropologist studying a poor black community in Mississippi (Stack, 1975). The concept of ‘forced familialism’, used by Gambardella and Morlicchio (2005) in a study on poor neighbourhoods in Naples (see also Chapter 6), likewise highlights the risk of entrapment in family obligations.
Finally, Paugam’s characterisation of the four social bonds regimes and three poverty forms risks overestimating the weakness of extended family ties in the regimes that are not organic familistic. It is true that, according to historians (see, for example, Reher, 1998), Europe has long been split into two different geographic areas concerning family ties. In Northern Europe (Scandinavia, the UK, the Netherlands, and large parts of Germany and Austria), the nuclear family has long been comparatively autonomous or isolated from kinship, thus (extended) family ties are relatively weak. On the contrary, in the Mediterranean countries, irrespective of patterns of family formation, whether neo-local or patri/matri-local, each household has been and still is strongly embedded within the kinship network. Consequently, expectations and practices of reciprocity refer to a more restricted group of people in the former than in the latter group of countries. These long-standing differences may also be traced in family law, with the Mediterranean countries having a set of ‘obliged kin’ that is much wider and has longer-lasting obligations than in the Nordic and Continental countries. In fact, Italy has the most extensive set of obliged kin (involving not only parents and children, but also grandparents, aunts and uncles, siblings and in-laws) and the longest-lasting obligations (Saraceno, 2003, 2016). These cross-cultural/cross-country differences should not be overplayed, however, particularly when referring to direct intergenerational ties. A number of studies on intergenerational support, for instance, show that there is a North/South declining gradient in the provision of informal support (money, care and emotional help) within intergenerational chains with regard to the number of people involved, with (p.7) people in the Nordic countries providing upward and downward support more often than those who live in Southern Europe. The gradient is inverse, however, when intensity is considered (see, for example, Ogg and Renaut, 2005; Albertini et al, 2007; Brandt and Deindl, 2013).
This finding indirectly disconfirms the thesis that a generous welfare state substitutes for (or even crowds out) family solidarity. It rather supports the thesis that where family help is less necessary, because public provision is strong, it is offered more often and more freely. On the contrary, when family support is more necessary, therefore also more ‘forced’ for lack of alternatives, it is offered in a more intensive but also more selective way. In other words, contrary to the somewhat infamous image of ‘amoral familism’ (Banfield, 1958), familialism as a pattern of protection is not a pure cultural trait: it may be (re)enforced and shaped by the weakness of what Paugam calls citizenship bonds – by the weakness or absence of public policies, by their implicit or explicit, in some cases even legally enforced, expectations concerning family solidarity (Saraceno, 2010; Saraceno and Keck, 2010; Calzada and Brooks, 2013; Teo, 2013). This is the meaning attached to the concept of familialism adopted in this book: high explicit or implicit expectations concerning the gendered division of labour and family solidarity supported by labour market and welfare state arrangements. Familialism may occur in different forms (Leitner, 2003; Saraceno, 2010, Saraceno, 2016; Saraceno and Keck, 2010): ‘familialism by default’, when there are no, or very scarce, publicly provided alternatives to family care and/or financial support for needy family members; ‘prescribed familialism’, when civil law prescribes financial or care obligations within the generational chain and kinship networks; and ‘supported familialism’, when policies, usually through direct or indirect (via taxation) financial transfers, help individuals within families uphold their financial and/or caring responsibilities. All countries present some degree of familialism, but some, such as the Southern European countries, are characterised by a comparatively high degree of familialism by default and of prescribed familialism, involving not only the household, but also kinship ties.
A change of perspective concerning the role of patterns of social regulation in producing poverty is offered by Castel (1995, 2000, 2003; see also the discussion in Morlicchio, 2012). Castel develops the concept of ‘misalignment’ between the requirements of macrosocial regulatory institutions (social citizenship based on salary, welfare protection based on male breadwinner regime, intrafamily solidarity) and the possibility, and in some cases even the willingness, of some social groups to fulfil these requirements. According to Castel, changes in both macro dynamics and personal preferences and attitudes broaden the share of groups that suffer the consequences of this misalignment. Changes in economic structure, production systems and labour market globalisation have, in fact, deeply (p.8) changed the status and employment careers of workers, especially, but not only, for those with low qualifications. Precarity and in-work poverty have become a widespread phenomenon. The male breadwinner household, therefore, has not only become less desirable at the cultural level because of changing gender roles and women’s expectations, and more unstable because of increasing divorce rates; it has also become less accessible and viable even for those who would like to implement this pattern of family formation. The less social protection systems are capable of adapting to these changes and to the ‘new social risks’ (see, for example, Taylor-Gooby, 2004; Bonoli, 2005) they put in motion, the greater the area of misalignment, thus lack of, or weak, social integration.
The interaction between different modes of protection – family, associative, charity, public – and between these and labour market conditions is therefore dynamic and multidirectional, giving rise to specific risk groups and experiences of poverty. Furthermore, poverty is not only the result of specific patterns of social integration, but also of their misalignment.
Poverty regimes, therefore, are the outcome of the specific patterns of interdependence and even causality between four areas of social regulation: family arrangements with their gender division of labour; welfare arrangements with their implicit and explicit expectations concerning family solidarity and the gender division of labour; the role of non-governmental (p.9) organisations (NGOs) and charities; and the functioning of the economy and of the labour market (see Figure 1.1).
Elements for a typology of contemporary European poverty regimes
In light of the discussion in the previous section, the most important indicators of a poverty regime are: (a) the activity, employment and unemployment rates in the working-age population; (b) the household paid work intensity (that is, the ratio of adult members to paid working hours); (c) implicit and explicit expectations concerning family solidarity and the household gender division of labour; and (d) what social risks are acknowledged and addressed as such, and with what level of generosity through public provision. EU countries differ to a small or large degree across all these indicators.
Drivers of household work intensity: women’s employment, and age on exiting the parental household
The incidence of low work-intensive households differs across countries, depending both on overall employment rates and specifically on that of women. As Figure 1.2 shows, there are cross-country differences both in men’s and in women’s employment rates, but they are greater in the case of women. The employment rates of women aged 20 to 64, in fact, vary from 80% in Sweden to 49% in Greece, followed by Italy at 53%. Countries such as Italy, that have a comparatively low employment rate for women, are also more likely to show a higher percentage of single-earner households that are particularly vulnerable to loss of job and cuts in working hours.
(p.10) In addition to women’s employment, two other phenomena impact both on household composition and on household work intensity: age on exiting the parental household and youth unemployment rates. Here, too, there are important cross-EU differences. In the Southern and Eastern European countries, the young traditionally exit the parental household at a later age than in Northern and Western Europe (see Cavalli and Galland, 1995; Eurostat, 2010). Eurostat (2018a) estimates indicate that the average age on exiting the parental household in 2016 was 26 at the EU level. However, it was 21−22 in the Nordic countries, while in Germany, France, the UK, the Netherlands and Estonia, the age ranged between 23 and a little over 24; in Greece, Spain and Portugal, it was just below 30, while in Italy it was 30.1, followed by Slovakia, at 30.8, and Malta and Cyprus, at 32.4 (p.11)
Youth unemployment is comparatively higher in some countries than in others. Italy in particular, together with Croatia, Greece, Poland, Portugal and Romania, already had a youth unemployment rate of over 20% in 2007. As Figure 1.3 shows, the aftermath of the economic crisis confirms and strengthens the unfavourable position of Greek and Italian youth, now also joined by Spanish youth. By contrast, Portuguese youth, and particularly Polish youth, now seem to be in a better position, while the Croatian youth unemployment situation has become more stable. Although leaving the parental household later might buffer the unemployed or precariously employed young against poverty, this may also stretch modest household budgets to the limit, bringing some of them under the poverty threshold or limiting possibilities to get over that threshold.
The working-poor: individual and household level
Comparative empirical research (Vandenbroucke and Diris, 2014) has found that national at-risk-of-poverty (AROP) rates for the working-age population and their households correlate positively with both individual employment rates and the share of individuals living in work-poor households. They correlate negatively with the level of spending on working-age cash benefits, such as unemployment benefit and child-linked transfers. These correlations indirectly indicate the mediating role of the household as a redistributive agency vis-à-vis the distributive role of employment, with regard to both individual and national poverty risks.
At the individual level, in fact, employment does not automatically protect against the risk of poverty, nor does unemployment translate automatically into poverty. A worker may have a wage above the minimum but nonetheless be poor, because s/he is the sole breadwinner in a large household, which is, therefore, also poor. On the contrary, a worker may have a very low wage or be unemployed but have access to adequate consumption levels because s/he can share in the income of other household members (Standing, 2011; Maître et al, 2012). This is why the concept of ‘working-poor’ is not univocal and why one should distinguish, when looking at poverty, between low-wage workers and working-poor on a household basis (see, for example, Peña-Casas and Latta, 2004; Andreß and Lohman, 2008; Maître et al, 2012). The former are workers who have an hourly or monthly wage two-thirds below the median wage in their country (OECD definition) or of 60% of the median wage (Eurostat definition).5 Their incidence differs across the developed countries and specifically within the EU. This is a difference that pre-dates the 2008 financial crisis and depends, to a large degree, on how the different countries have reacted to the challenge of global competition and technological advancement by modifying labour market regulations (Salverda and Mayhew, 2009). Nevertheless, in all of the countries, as one might expect, the most exposed to the risk of earning a low wage are those workers with the lowest levels of education and qualifications. Furthermore, in all countries, low-paid jobs are concentrated in specific sectors, such as retail commerce, hotel services and catering, personal services and increasingly, so-called platform jobs (delivery riders, call centre operators, and so forth) (Lucifora et al, 2005; Lucifora, 2019). Less protected by social security, these jobs are also concentrated among young people of both sexes and women of all ages, as well as among migrants. The age and gender characteristics of the majority of low-wage workers is one of the reasons why having a low wage doesn’t always translate into also being poor from the point of view of access to consumption, although it may represent a serious constraint on the possibility of forming one’s own household or leaving an unsatisfactory partnership.
(p.12) The working-poor on a household basis (in-work poverty) are those who, irrespective of their wage level and taking account of other household incomes and household size, are at risk of poverty.6 While being a low-wage worker is more often associated with being young and/or a woman, being working-poor on a household basis is more often associated with being a male sole or main breadwinner over 35, or a single mother of any age. Single-earner households are, in fact, those most exposed to the risk of being poor and of transforming a worker with a modest, even if not low, wage into a working-poor living in a poor household. Countries with a high incidence of single-earner households are more likely to have a comparatively higher incidence of poverty than countries where dual-earner households are widespread, particularly if child-linked social transfers are lacking or insufficient (see, for example, Marx and Nolan, 2014). As Chapter 5 will show, in Italy, this situation also translates into a very high risk of children’s poverty, particularly if children have two or more siblings.
Public provision of support
With regard to public forms of social protection and their efficacy in combating poverty, one should distinguish between at least five distinct areas: (a) income protection during old age through the pension system; (b) income protection in case of unemployment; (c) child-linked income transfers to support child-rearing costs; (d) minimum income guarantee for the poor; and (e) care policies to support both working parents (and particularly working mothers) and equal opportunities among children.
In all developed countries, the pension system has proven to be the most efficacious means to reduce poverty among the old. Moreover, in most countries, the contributions-linked pension system has been supplemented either with a basic, universal citizenship pension or with a social pension targeted at those who do not have a contributory record and are poor. The other relevant income transfers from the point of view of poverty protection − unemployment benefits, child-linked income transfers, social assistance minimum income guarantee − are targeted at the working-age population. Their generosity, degree of universality and coverage vary greatly across countries (Saraceno and Keck, 2010; Bahle et al, 2011; Cantillon et al, 2014; European Commission, 2014; Vandenbroucke and Diris, 2014; Gábos et al, 2019). With regard to minimum income measures in particular, it should be mentioned that, together with the Eastern European countries − which introduced some kind of minimum income provision as part of the requirements to join the EU − the Southern European countries were among the latest EU member states to introduce them, with Portugal going first (although at a very low level), Spain following stepwise and with wide cross-regional differences, given its strong regional autonomies, and Italy (p.13) and Greece coming last. Figure 1.4 shows how cross-country differences in the GDP share of expenditure through cash benefits persist over time, notwithstanding changes in the degree of protection (see also Adema et al, 2014).
With particular regard to both male and female individuals who have a weak labour market position, active labour market policies may also play an important role in keeping them attached to the labour market, although the design is important in order to avoid stigmatisation and revolving-door mechanisms. Again, countries have different traditions with this kind of policy, including their coverage and efficacy (see, for example, European Commission, 2014). The same applies to lifelong learning opportunities, which may be indispensable for keeping up with changing modes of production.
Concerning the role of care policies in protecting against the risk of poverty, two aspects should be considered. First, they are a crucial means to support women’s labour force participation and thus to reduce the poverty risks associated with both low household work intensity and single motherhood. Second, they reduce inequalities in the ability to provide and receive adequate care. In the case of small children, they also reduce developmental risks associated with being born and growing up poor (see, for example, Smeeding et al, 2011; Ermisch et al, 2012; OECD, 2018a).
(p.14) As many comparative studies have documented, there are important differences in the degree to which women’s labour force participation is supported by public polices and there is an, albeit partial, rebalancing of the gender division of labour through a complex package of work−family reconciliaton policies (see, for example, Gornick and Meyers, 2005; Saraceno and Keck, 2010, 2011; Naldini and Saraceno, 2011; Keck and Saraceno, 2013). Italy and Greece, as well as some of the Eastern European countries, show the largest gaps in the household gender division of labour. They also belong to the group of countries with less developed work−family reconciliation policies. With particular regard to childcare coverage, Figure 1.5 shows that Italy is the only country, among those with the lowest attendance, not to have substantially improved since 2007, while Greece has made the greatest effort notwithstanding the severity of the economic crisis. The Syriza government, in fact, greatly invested in increasing the offer of childcare places, almost doubling the funds allocated to this area. Furthermore, the initial decision to grant free childcare to children of low-income working mothers was also extended to include children of low-income unemployed mothers.7
(p.15) Italy is also among the countries with a comparatively less generous system of paid paternity and parental leave, although it is more generous than Belgium, France, the Netherlands, Portugal or the UK (and Spain, until the 2019 reform). A similar picture emerges with regard to the provision of care for the old, although in this case all the countries performing worse than Italy are in Eastern Europe, as well as Spain and Portugal (see, for example, Albertini and Pavolini, 2015; Eurostat, 2017).8
How poverty regimes differ across the EU
Based on the concept of poverty regime, the above-mentioned indicators enable us to draw a stylised representation of different poverty regimes (see Figure 1.6).9 Focusing on the working-age population and their households, countries can be grouped according to the efficacy of their social regulation system (public social protection, labour market inclusiveness and family solidarity) in protecting against poverty. Countries in groups A and B have high to medium income support, inclusive labour market policies and enabling services, and these coincide with relatively good labour market and poverty outcomes. They are differentiated mostly by higher expected family solidarity and a higher degree of social stratification in the provision of public support in group B than in group A. Group C includes the two Anglo-Saxon countries, characterised by medium performance and outcomes and low to medium expected family solidarity. The countries in groups D and E have both less comprehensive income support and fewer inclusive labour market policies and enabling services. This scarcity, in turn, undermines the functioning of their labour markets and does not prevent poverty risks. The three major Mediterranean countries are in group D, while Greece is in group E, together with most Eastern European countries. In groups D and E, not only are all indicators of poverty high, but in-work poverty is also more frequent because of the incidence of low individual wages together with high expectations with regard to the redistributive and buffering role of the household and the family. This phenomenon highlights the Janus role of the family with regard to poverty – as a protective agency, but also as a cause of poverty (see also Saraceno, 2015a), particularly in countries such as Italy, with a weak system of social protection, low women’s employment and high youth unemployment.
Both the Mediterranean and Eastern European countries also show a high persistence of poverty, which is an important feature of the poverty experience (European Commission, 2013). As a large body of study has highlighted, in fact, it makes a difference whether poverty or material deprivation are a transitory, recurrent or continuous experience (see, for example, Bane and Ellwood, 1986; Alcock, 1997; Jenkins, 1999; Saraceno, 2002a; Fouarge and Layte, 2005; Watson et al, 2018). The persistence of poverty is particularly worrisome in the case of children, since growing up poor is highly predictive of also being poor when becoming an adult (see, for example, Smeeding et al, 2011; Ermisch et al, 2012; OECD, 2018a). A recent study on EU countries (Macmillan et al, 2018) found that growing up in a jobless (p.16) household produces long-term scars at educational and employment level, favouring the intergenerational transmission of disadvantage. This adverse outcome is not universal, however, and with regard to (un)employment, is more pronounced for males. Generally, countries with higher proportions of children in jobless households have worse medium- and longer-term outcomes for these children than countries with a lower proportion of such households. The former countries are also worse at protecting such children from becoming the next generation of jobless households.
Italian poverty regime
The analysis of the characteristics of poverty in Italy, before and after the crisis, as well as of the policy responses, are the specific object of Chapters 3 to 7. In this section, following the conceptual framework presented previously, the background characteristics of the Italian poverty regime are further specified in order to explain why, in Figure 1.6, Italy falls into group D. Synthetically, they may be described as follows (see Figure 1.7): (a) labour market segmentation and high territorial differentiation in economic development; combined with (b) a parallel differentiation in welfare provisions, particularly with regard to services; (c) welfare arrangements that still largely implicitly or explicitly rely on extended family solidarity, on the one hand, resulting in a kind of forced familialism that, on the other, exacerbates the gender division of labour in the family, particularly in low-income, often single-earner, households; and (d) the important role of charities and NGOs in providing welfare, but with important territorial differences in their incidence and capability. These characteristics result both in a strong geographic concentration of poverty and in a comparatively high incidence of working-poor and of children’s poverty. The increase in the number of resident foreigners (mostly economic migrants and asylum-seekers) has further strengthened the incidence of working-poor and children’s poverty, while being the main driver for the increase in poverty in the Northern regions. (p.17)
With regard to family and household arrangements, notwithstanding an increase in women’s and particularly mothers’ employment (particularly in the Centre-North regions), there is still a high persistence of gender division of family labour that is partly supported by cultural models concerning gender appropriateness and competence, although with different degrees of intensity across social classes and across regions. An increasing division is emerging in behaviour and opportunities not only between better-educated and lower-educated women (see Figure 1.8) and between those living in the Centre-North and in the South, but also between better-educated and lower-educated couples (see, for example, Istat, 2015). Women’s non-participation in the labour market is concentrated in the latter group, particularly in the South, and especially if children are present. (p.18)
These cross-regional differences are further strengthened by the regionally unequal distribution of care services, both for young children and for frail old people. Furthermore, as mentioned previously, the young tend to remain in the parental household longer than in the rest of Europe, to some degree irrespective of their employment status. In Italy, in fact, the model according to which young people exit the parental household mainly because of marriage or couple cohabitation or because of migration is still largely prevalent (Saraceno, 2015b). This is reinforced by the increasing difficulties the young meet in entering the labour market and by a housing market that is strongly skewed towards ownership rather than rent, thus requiring some capital accumulation, parental help and a degree of job security (Bernardi and Poggio, 2004; Poggio, 2013). (p.19)
For the purposes of this discussion, the most interesting features of the Italian economy are the importance of (often very) small firms with family ownership and the development of the low-qualified tertiary sector, connected to the spread of non-standard employment contracts since the end of the 1990s. On average, the size of Italian firms is 3.8 employees (Istat, 2017), which means that two-thirds of total employment is in firms with less than 20 employees. Often these micro firms are owned by entrepreneurial families across generations − a well-known case of successful economic development that has been widely studied in Italy and abroad (Bagnasco, 1977; Piore and Sabel, 1984; Trigilia, 1986a, b). Productivity is generally lower in small than in large firms, however. Wages are also lower, and the negotiating power of trade unions is very reduced. In other words, the conditions of salaried workers are less favourable in these firms than in large companies, and workers in small firms are exposed to higher job instability and are less organised in trade unions. In the event of redundancy, they are also less protected by Italy’s fragmented unemployment protection system (Berton et al, 2009).
The high incidence of small, often non-unionised, firms has also favoured manifold strategies for irregular employment of workers. In 2016, Istat estimated 3.7 million ‘units’ of full-time equivalent unregistered workers, amounting to 15.6% of total employment (Istat, 2018a). Clearly, workers employed in this vast shadow economy have to deal with job instability, very low work conditions, no chance of a career, no access to social insurance benefits, and so on. When they are the main (or only) income earner in the household, their and their household’s poverty risk is high.
(p.20) It should be added that even before the 2008 crisis, the male breadwinner family model was not accessible to everybody in Italy insofar as, particularly in the South, even male full employment in the regular economy was far from guaranteed, as shown in Figure 1.9. Figure 1.9 also shows that when circumstances deteriorate, as in the early 1990s and then following the 2008 crisis, they do so more in the South than in the other regions, widening the regional gap.
A second poverty-relevant feature of the Italian economic structure is the large low-qualified tertiary sector, including commerce, personal and family services, door-to-door sales and the like. This is a development of post-Fordist capitalism that is common to almost all countries and one of the factors that has boosted the rise of inequalities, especially in urban contexts. In Italy, it is of particular importance because in urban areas (mainly, but not only, in Southern regions) this is virtually the only employment opportunity for low-educated workers, creating a sort of occupational trap in very low-quality jobs. Among them, there is also an increasing number of formally self-employed people, whose job conditions are even more unstable.
(p.21) The third element of the Italian economy worth mentioning is the diffusion of non-standard employment contracts, primarily among the young, and of involuntary part-time contracts for both women and men. Since the second half of the 1990s, these contracts have been included in the set of legal forms of employment, increasing the number of workers involved up to the current (2018) figure of 3.14 million or 17.4% of dependent occupation. Support for the introduction of flexible, non-standard contracts was based on the argument that it would reduce the very high youth unemployment rates. Evidence (see Figure 1.10) shows, however, that following a significant reduction in youth unemployment in the first half of the 2000s, the financial crisis had a dramatic impact on the young, leading to a rise in the youth unemployment rate to over 40% in 2014 (30.4% in 2018), with striking differences between the North of the country (20.3% in 2018, with a peak of 31.1% in 2014) and the South (45.8% and 54.1%, respectively).10
The disadvantaged condition of the young in the labour market goes hand in hand with a broad diffusion of so-called NEETs (not in employment, education or training): Italy has the highest EU NEET rate, at 28.9% of people aged 20−34, against a European average of 16.5% (8% in Sweden, 11.4% in Germany and 17.7% in France; Eurostat data at 2018).
Turning to welfare state protection, alongside an overall well-known skewedness towards pensions and pensioners, the fragmentation of the unemployment instruments should be pointed out. In addition to the fact that workers in the secondary economy are largely unprotected, within the formal labour market unemployment protection also differs, depending on whether someone lost their job in a large industry or small enterprise. In the case of the former, the Extraordinary and Ordinary WGFs, two measures that must be negotiated between employers, trade unions and the state, provide more generous and often longer-lasting support than the normal unemployment benefit available to those who lose their job in a small enterprise. Furthermore, rural workers have a different system of protection. Only starting in 2012, a reform was initiated towards a partial homogenisation of the whole system, while enlarging it to cover some of the new figures of atypical workers, although with less generous benefits. Nonetheless, differences persist.
Categorical fragmentation and lack of universality also characterise child-linked income transfers. These often, by design, leave out the poorest, while (p.22) discouraging mothers’ labour force participation (at least in the formal economy) in the lower household income brackets, insofar as the more generous benefit is targeted only at dependent workers on the basis of a household income test (see Chapter 7). As shown above, childcare services for the under-threes, full-time school and long-term care services are scarce and unevenly distributed at the geographical level.
Finally, until 2018 a minimum income provision was lacking at national level, leaving responsibility for addressing the needs of the poor to local administrations, local charities and NGOs, in addition to family solidarity. Given the different public and private resources available at the local, mostly municipal, level, as well as the different local political traditions, this situation contributes to substantial fragmentation, as well as discretion in the provision of support.
As the following chapters will demonstrate, this overall framework explains why in Italy poverty is mainly experienced as a family, not an individual, experience, involving a comparatively large quota of working-poor on a household basis, particularly when more than one child is present. It also explains why Italy is one of the countries where children have a higher poverty rate than adults. Finally, it explains why, in addition to being concentrated in the South, in recent years poverty is also concentrated among the foreign population and their households. These are, in fact, in a weak position in at least three of the areas of social regulation or protection: (a) their family is often limited to the nuclear family in Italy, while they may maintain obligations to the extended family in their country of origin; (b) their position in the labour market is weak because they are mostly located in the bottom, less-qualified levels or in the informal economy, and are consequently unable to access more robust forms of public social protection; and (c) in addition, specific regulations often exclude them – if they are non-EU citizens – from certain public provisions, or severely restrict their access, as is happening with the recently introduced minimum income provision. Often the only non-family solidarity that foreigners can count on is that of ethnic associations or charities.
In order to understand the role played by the specific characteristics of the Italian poverty regime in reacting to the 2008 financial crisis and how the crisis, in turn, affected them, it is useful to have a summary overview of what happened across the different EU poverty regimes described in Figure 1.6. This will be provided next, in Chapter 2.
(2) Other countries (Eastern European, North American, Australian and so on) might also be assimilated to this model, but for a more accurate discussion the analysis is limited to Western Europe, given its longer tradition in welfare state arrangements and labour market regulation in the context of a market economy and a democratic state.
(3) The situation has changed since the so-called ‘Jobs Act’ reform (Law no 183 of 10 December 2014), which introduced more comprehensive coverage (although not for those entering the formal labour market for the first time) while eliminating the Extraordinary Wage Guarantee Fund (WGF) that allowed someone to remain formally employed for a long time even though not working and having little or no possibility of actually returning to work because of the enterprise had a major crisis and/or restructuring would imply a reduction in the work force.
(4) It should be noted that these figures average the age on exiting the parental household of both men and women. However, in every EU member state, women tend to leave the parental household earlier than men.
(5) It is worth nothing that Eurostat’s definition of in-work poverty differs from the American Bureau of Labor Statistics’ definition of working-poor in its consideration of the working status of individuals. In the US, the emphasis is placed on the fact of being in such a precarious job that the work is absolutely secondary as a means of support compared to government assistance. The European approach views the person as a ‘worker who is also poor’, that is, a worker who is consistently employed but who belongs to a poor household.
(6) That is, they have an equivalised disposable income below the at-risk-of-poverty threshold, which is set by Eurostat at 60% of the national median equivalised disposable income after social transfers.
(7) Personal information received from the Greek sociologist Maria Petmesidou.
(8) It should be added that, as will be shown in the following chapters, the Italian averages both with regard to women’s employment and the availability of social care services hide a geographical differentiation that is much greater than anywhere else in the EU, with both women’s employment and the availability of services being much lower in the South than in the Centre-North.
(9) As in all typologies, the clustering of countries is always debatable and highly dependent on the weight given to each variable, as well as on the variables included. The aim here is not to offer a typology set in stone, but to provide a stylised operationalisation of the poverty regime concept.