The Empoyment Effects of the Italian Minimum Guaranteed Income Scheme Reddito di Cittadinanza

The Italian guaranteed minimum income programme is the topic of a heated debate scarcely supported by empirical evidence. We investigate the effects of the programme on the number of days worked by different types of vulnerable jobseekers who receive the related income transfer from 2019 but are subject to activation attempts by employment services. We use data from Tuscany, in many ways a typical Italian region. To draw causal claims, we adopt a stratified difference-in-differences approach with multiple time periods and staggered treatment adoptions. Our findings suggest that the programme has heterogeneous effects among different types of users but also that, all in all, it is rather employment-neutral, in the sense that it neither creates significant disincentives to work nor succeeds in creating sufficient employment opportunities to solve the problem of job insecurity. An anti-poverty strategy that does not feed further welfare dependency would require a qualitative leap forward in activation efforts by employment services