The consequences of the 2020-2023 shocks on households’ income inequalities in Italy: measures, impact of policies, households’ groups characteristic
Conference
64th ISI World Statistics Congress - Ottawa, Canada
Format: IPS Abstract
Session: IPS 505 - Impact of global challenges on income inequality in 2020-2023
Tuesday 18 July 2 p.m. - 3:40 p.m. (Canada/Eastern)
Abstract
Several shocks have featured the 2020–2023 period, with consequences on households’ income inequalities. On the one side the Covid-19 crisis (2020-2021) provoked a deep economic crisis, and
on the other side the sharp raise of inflation (starting from mid-2021 and furthermore pushed by the war in Ukraine) characterized the last couple of years. The consequences of Covid-19 crisis have reduced households’ income and those of high inflation have eroded their purchasing power but, in both the cases, the poorest households are those mostly affected by the negative impact of these shocks.
First the paper investigates how much the economic crisis in 2020-2021 had different consequences, in Italy, on the high-income and low-income households, and how much the government support to income of the poorest people avoided worse consequences on this group, limiting the explosion of inequalities. Specifically, data on equivalized income quintile share ratio (S80/S20) and on absolute poverty measures will be commented to illustrate the impact of these policies in 2020 and 2021 and how much they avoided worse consequences of the crisis.
The recovery in 2021 is shortly recalled moving, afterwards, to the impact of 2021-2022 inflation on the two extreme groups of households (the poorest and the richest ones). Since 2012, the Italian national statistical institute (Istat) has been regularly releasing Harmonized Index of Consumer Prices (HICP) referred to five different sub-groups of population (of the same size), detected by ranking the
households by their equivalent expenditure value (from those with the lowest spending power to those with the highest one) estimated by Households’ Budget Survey (HBS) data. Recently, it has been
compiled an experimental HICP referred to sub-populations defined according to distribution of the equivalized income (derived from HBS also in this case). The methodology used to compile these
new indicators is essentially the same as for the existing indices previously mentioned but using income to detect the five groups. The authors analyse the different impact of Italian inflation in 2021-
2022 on the two extreme groups (that with the lowest and that with highest income) and how much it has meant an erosion of the purchasing power of poorest
households wider than that incurred by the
richest one. Although HBS and IT-SILC (Statistics on Income and Living Conditions) data are not released yet, the impact of this erosion on the inequality is estimated looking specifically to the
deflated aggregates. Finally, some main characteristics (socio-economic and demographic) of the households’ groups are analysed.