Poverty Dynamics: Analysis of Household Incomes in Italy

Poverty increased in Italy during 1993, both in incidence and intensity. This study focuses on the changes which have taken place after the crisis. The data set used is the Bank of Italy Survey on Household Income and Wealth (SHIW), and poverty is defined in terms of disposable income. A descriptive analysis which uses intensity and incidence indices is provided and probit models are estimated on the poverty probability faced by households of the 1993–95 SHIW panel. The latter microeconometric analysis shows that households living in the South of Italy, with an unemployed husband and whose income was further below the poverty line in 1993, are more likely to have remained poor in 1995. Households whose head has a higher level of education and where the number of employed members is higher were more likely to escape from poverty in 1995. On the whole, it can be stated that poverty did not decrease after the 1993 recession and the poverty status of households living in the South of Italy did worsen after the crisis.