Implementing a Guaranteed Minimum Income in Italy: An Empirical Analysis of Costs and Political Feasibility

In this paper we analyse a hypothetical welfare reform that would introduce a Guaranteed Minimum Income (GMI) in Italy, the only country of the pre-enlargement EU-15 where a programme of this type does not exist. First we compute the overall cost of a GMI under different assumptions about its generosity and adjustments for differences in the cost of living. Then, we discuss alternative options to finance the additional resources needed to implement the programme. Finally, we present an analysis of winners and losers from such reform and we discuss the type of preferences for redistribution that would be required to obtain political support for a GMI from the majority of the voting population.