Security or Equality? The Difficult Reform of the Italian Welfare State

The analysis provided in this chapter deals with a topic that rests at the centre of public debate: the impact of the welfare state and, in particular, of the legislation regulating the labour market with regards income inequality. It is generally presumed that social policies have a counterbalancing effect on economic inequalities. The justification for social spending has usually been drawn from the assumption of its equalizing effects (Castles and Mitchell 1993, Castles and Obinger 2007). In an intuitive way, we expect that those countries with more generous social programs will also be more economically equal. However, a comparison between the historical trends of social spending for a sample of OECD countries and the levels of economic inequality, defined by the Gini coefficient, ¹ does not completely confirm this assumption. Some countries seem to contradict the correlation between high levels of social spending and low income inequality.