Civilian Disability Pensions as an Antipoverty Policy Instrument? A Spatial Analysis of Italian Provinces, 2003–2005

The purpose of this paper is to investigate whether civilian disability pensions have been used as an antipoverty measure in Italy. We applied a two-step analysis to Italian provincial data for the years 2003–2005. We implemented a classic panel analysis, followed by a two-step GMM (Generalised Method of Moments) analysis in which we introduced the spatial variable. The analysis shows that the number of civilian disability pensions is not related to disabling disease, but it is related to the unemployment rate in some areas and to the rate of poverty everywhere. These results robustly hold when the spatially lagged dependent variable is introduced among the regressors. The spatial variable allows us to take into account the local dimension and the possible social, historical, and cultural links among provinces that go beyond administrative boundaries. In discussing the results, we stress that the figures reflect the number of civilian disability pensions granted, not those requested. Moreover, the national legislation on the attribution of civilian disability pensions is administered locally; therefore, its application may reflect degrees of discretionary interpretation. We propose that there is room to interpret the use of civilian disability pensions as an antipoverty policy instrument in areas characterised by economic difficulties. However, we suggest that civilian disability pensions are particularly unsuited to play the role of an assistance policy instrument; once granted, they are seldom withdrawn despite possible changes in the financial situation of the recipient.