A micro-econometric analysis of the antipoverty effect of social cash transfers in Italy

We analyze the anti-poverty effect of social cash transfers using a micro-econometric approach.\r\nAggregate analyses, based on comparing average poverty indicators before and after public transfers,\r\nfail to address who receives the transfers and how the transfers are distributed among the poor. We\r\nconsider three dichotomous outcome variables: (i) poverty status before the receipt of transfers; (ii)\r\nthe receipt of transfers; and (iii) poverty status after the receipt of transfers. We use a trivariate probit\r\nmodel with sample selection, connecting the outcome variables to the characteristics of the household\r\nand its head. Our empirical results highlight that the Italian social transfers system overprotects certain\r\nhousehold typologies at the expense of others, as social transfers are primarily awarded to employees\r\nwith permanent positions and the elderly, while the system is not generous enough to large households\r\nwith dependant children, the self-employed, temporary contract workers, and the unemployed.