The COVID-19 pandemic had severe consequences on human health and economic activity worldwide. Different policy responses have been implemented to tackle them. Among COVID-19 policy responses adopted to contain and reduce health and economic effects, it is possible to distinguish three categories: containment, economic and health policies. The goal of the paper is to assess how COVID-19 policy responses may be associated to human health and economic effects by looking at 196 countries from 2020 to 2021. Applying a panel fixed effects regression analysis, we show that stringent containment policies alone do not have an evident relationship with human health and that worldwide vaccination availability is the most effective in reducing COVID-19's negative repercussions on health and national economic performance. Results suggest that containment policies have a short-term negative relationship with economic activities, while government income support can play a key role in mitigating immediate economic losses. Moreover, COVID-19 fiscal stimuli may be a complementary powerful tool aimed at reducing negative side-relationships between the COVID-19 crisis and the economy.
The fiscal crisis that Italy faced in the last two decades on the XX century, forced the Italian government to adopt innovative policies and institutions to manage a growing public debt. This dynamic represents an interesting case study in a world, like the contemporary one, in which the expansion of public debt affects many developed economies. Starting from the dynamic equation of the public debt-to-GDP ratio, the contribution highlights the role of financial instruments and of the primary and secondary markets in the management of public debt. With reference to the functioning of the secondary market, the contribution focuses on the importance of liquidity to control debt service and related risks, and on the microstructure as the main conducive tool to obtain it. Finally, using the main liquidity metrics of the secondary government bond market, the contribution reconstructs the dynamics of market liquidity over the last twenty years.
This paper explores the relation between R&D and the evolution of labour demand in a sample of over 5,600 Italian manufacturing and services firms with at least 10 employees over the period 2014-2017. The analysis is based on the integration of several sources of official statistics, combining survey and administrative data. The empirical investigation is performed by estimating a standard labour demand equation augmented by R&D investments, checking for potential bias due to self-selection. The richness of the dataset allows us to investigate the sources of growth in the number of employees, as well as the heterogeneity emerging among workers with different education levels. Results show a positive association between R&D firms' efforts and labour demand - especially for high-educated workers -, though heterogeneous patterns turn out depending on firms' size, business age and the geographical area where firm is located.
A comparative analysis of the first implementation of the new GSP clarifies several issues. The << net expenditure >> indicator has been applied by the Commission in an unnecessarily opaque manner both in terms of composition and dynamics, leaving too much room to unobservable variables and relying too much on long term uncertain estimations. But the Commission's guidelines are not as binding as one could have feared, largely allowing countries to follow their own path in a multi-annual framework. Given the challenges, the new rules are, however, too restrictive for the EU as a whole, excessively constraining even countries with large fiscal space.
The National Recovery and Resilience Plan (PNRR) has entered its final phase. This article discusses its current status, examining three critical topics: (1) its implementation across areas of policy intervention and regions, in terms of both resource allocation and actual spending; (2) major bottlenecks and delays in the execution of investment projects and structural reforms; and (3) the macroeconomic impact of the PNRR, evaluating the expected returns to such a large-scale plan in terms of growth and employment. The analysis explores territorial imbalances and weaknesses in the design of the plan, such as the oversized role of local governance and the prevalence of investments in physical capital over those in human capital. Macroeconomic projections suggest only a moderate impact of the PNRR, amid substantial uncertainty on its long-term effects, casting doubts on its ability to enhance competitiveness and boost productivity after decades of stagnation.
This article examines the implementation of asymmetric federalism in Italy, tracing its historical origins, recent legislative developments - culminating in Law No. 86/2024 - and potential future trajectories. We first outline the constitutional basis of Article 116(3) of the Italian Constitution and the requests for further autonomy exploiting this article advanced by three northern regions since 2017. We then reconstruct the legislative milestones that led to Law No. 86/2024 and explore the effects of a recent decision by the Constitutional Court on the Law in clarifying the scope and limits of asymmetric federalism. Special attention is devoted to the notion of Essential Levels of Performance (LEP), identified as non-negotiable standards in the provision of public services to ensure territorial equity. We critically assess the main challenges posed by Law No. 86/2024, including the complexity of the bilateral commission framework and the ambiguity surrounding the selection of subject matters to be decentralized - particularly concerning national and global public goods. In conclusion, the study argues in favor of a cautious, limited application of asymmetric federalism, restricted to functions already partially administered by the regions - such as education and local finance - and draws on the institutional experience of Italy's Special Statute Regions as potential models. Ultimately, the paper contends that beyond ideological polarization, the core challenge lies in designing a coherent, efficient, and constitutionally sound framework for regional governance in Italy.
The year 2024 marked the return of the Stability Pact for public finances in European countries, following its suspension between 2020 and 2023. Consequently, 2024 became a year of fiscal adjustment, in line with the trend that had already begun in 2023. Italy, however, only partially aligned with the fiscal trajectories of other European countries. Its fiscal policy was more expansionary in 2023 and it is expected to become more restrictive from 2024 onward. With the return of the Stability Pact, Italy's fiscal policy now faces the challenge of reconciling four trends that are difficult to align: the growth of capital expenditures driven by European NGEU policies; the rise in interest expenses due to central bank decisions and debt dynamics; the goal of containing the tax burden, as outlined in the government's programs; and the need to reduce the deficit, as required by European rules. So far, the coherence among these four trends has been made possible by the fact that fiscal balances remain significantly worse than pre-pandemic levels. Additionally, inflation in recent years has provided an opportunity for partial price indexation of certain expenditure items and allowed fiscal drag to support revenue growth.
The article analyzes the first application of the Stability and Growth Pact in Italy following the reform introduced in 2024. After summarizing the main changes and the quantitative effects compared to the previous regulatory framework, it examines the process of defining Italy's structural budget plan, starting from the technical trajectory proposed by the European Commission. The policies adopted by the government appear, for now, to have fully utilized the available fiscal space during the current legislative term. The article concludes with some reflections on the challenges that the new rules pose for forecasting and monitoring tools in public finance.
This article examines the theoretical foundations and empirical evidence surrounding the implementation of a wealth tax targeting the super-rich. It begins by presenting data on current wealth inequalities, with a focus on the European Union and Italy. It then reviews recent policy proposals advocating for wealth taxation and evaluates the normative arguments in favor of such measures, addressing common criticisms. The article also explores the administrative challenges that may hinder effective implementation and offers estimates of potential revenue gains. Together, these elements aim to inform a comprehensive and realistic approach to taxing extreme wealth.
The 2025 Budget Law replaced the existing social security contribution reliefs with two alternative measures: an additional tax credit for employees and a new cash transfer, both reserved for dependent workers. Additionally, it introduced restrictions on the tax credits for items of expenditures for higher-income taxpayers, adjusted based on income and the number of dependent children. The first two measures largely replicate the previous contribution-based system for most employees, though they complicate the structure of personal taxation and affect the number and intensity of effective marginal tax rates. The reform on tax credits for items of expenditure has very limited financial impact, as the additional revenue is estimated at just a few hundred million euros. It further complicates the direct tax system and is debatable because it allows for tax-advantage calculations. Finally, its adjustment based on the number of children is not always consistent with the principle of tax personalization.
According to the latest available data, in 2021, the reduction in VAT evasion and the overall tax gap continued, but the growth of income tax (IRPEF) evasion by selfemployed workers and sole proprietors resumed. Furthermore, the first estimates for the following years, particularly for 2023, indicate a potential reversal of the trend, which could also be linked to signs of reduced intensity in anti-evasion efforts, associated with numerous amnesty measures and the planned reduction in the number of audits. More generally, the incompleteness of some reforms, even those initiated, concerning the powers and tasks of the tax administration, and the gradual distortion of the biennial preventive agreement, originally introduced as a measure to encourage compliance but then progressively transformed into an inequitable and ineffective tool, are also a cause for concern.
In Italy, new and old territorial disparities are currently facing a renewed context of raising geopolitical uncertainty and decreasing economic prospects. After providing a discussion about the current context, this work has the objective of analysing the Special Economic Zone - ZES unique, the new instrument of public support introduced in 2024. The study provides an update discussion of the ZES, also in the light of the existing measure of the tax credit for investments in the South of Italy, already operative up to 2023 that shows some similarities with the ZES. The study also describes the theoretical framework of the ZES, by presenting a reconciliation with the economic literature related to it. A preliminary empirical analysis is developed using available data for the ZES and for the tax credit for investments in the South of Italy. Finally, policy conclusions are discussed.
Italy's challenges of NHS reorganisation are set within a context of resource planning that includes the end of PNRR's extraordinary allocations, the restart of the Stability and Growth Pact and the return to a discipline-based budget policy. Health expenditure will grow, but at a slower rate than GDP, with potential risks for the NHS sustainability. Staff recruitment has not been planned any longer by the last budget law, while flexibility has been encouraged and the working age prolonged. Private intramoenia activity by NHS staff has been incentivised with increased hourly rates and the relative earnings taxed under flat taxation, also extended to nurses' overtime. Due to a change of priorities, the focus of health policies has been shifted to the management of long waiting lists, which lack a unified information system. Growing shares of public health expenditure have been reallocated towards private providers. The strengthening of integrated health home care, with the goal of covering 10 per cent of the over-65s, led to the concentration of extraordinary funds on low complexity health home care, as the long-term care reform, currently being implemented, suffers from insufficient funding. There remains an urgent need for a better resources' allocation and to define national tariffs based on risk stratification, in order to ensure comprehensive and continuous home care over time for patients who require it.
In recent years, Italy has introduced significant innovations in the field of cash transfers to families, particularly with two new measures: the Inclusion Allowance (Assegno di inclusione) and the Universal Child Benefit (Assegno unico e universale per i figli). After a description of the evolution of poverty and inequality indicators in Italy over the past fifteen years, this paper analyzes the effects of these two reforms. We describe the key features and early distributional impacts of the Inclusion Allowance, which replaced the Citizenship Income, and examine how its beneficiaries compare with families in absolute poverty. We then review the Universal Child Benefit reform, evaluating its redistributive effects and its role in aligning Italy with European standards in the field of cash transfers to families with children. The analysis highlights some setbacks, some progress and areas where improvements can be made.
Over the past thirty years, Italy has gradually become entangled in a complex pension puzzle-an intricate system shaped by prolonged reform processes, conflicting political positions, and repeated policy reversals. As with many puzzles, not all configurations yield solutions; some offer multiple paths, while others only one. In such cases, continual reshuffling may hinder rather than help the search for resolution. This paper begins with a brief overview of the key components of Italy's pension system puzzle. It then examines whether the recent innovations introduced by the latest Budget Laws signal the emergence of a potential solution-perhaps not definitive, but capable of opening a viable path forward. Finally, the paper offers some brief concluding reflections, extending the discussion beyond the pension system itself.
Over the past two years, Italy's public education sector has undergone significant reforms, especially on teacher recruitment, school guidance, and technical and vocational education. By 2025-2027, these initiatives must translate into tangible results, particularly by addressing the inefficiencies of the teacher recruitment system, which remains overly complex and struggles to align teachers' skills with the needs of schools and students. At the same time, schools and tertiary education institutions face a growing demand from students with special educational needs, who should be fully included in the educational system. This paper examines the financial measures introduced in the 2025 Budget Law and outlines the key policy priorities set forth in the Medium-Term Structural Budget Plan (MTSBP). It underscores the importance of a strategic allocation of resources to foster inclusive education, highlighting the need for efficiency and long-term alignment with national educational objectives to successfully address emerging challenges.
This paper considers how university costs play a role in affecting higher education attendance in the European context, and what role private financial institutions can play in easing cost burdens for families. We begin by asking whether tuition or related costs are a limiting factor for European students, in particular those from less wealthy families. We provide evidence that in Europe the largest financial barrier to university is housing as few countries charge a meaningful tuition and many provide progressive income supports. We then consider the potential role that private financial institutions can play, drawing on research from the US, UK, and other European contexts, focusing on two mechanisms: loans and savings accounts. Prior research suggests that private loans have shown varying effectiveness, largely in the US context, and come with meaningful risks for families and lenders. We propose the development of a youth educational savings vehicle has fewer downside risks, noting prior efforts have demonstrated that effective schemes are difficult to design. We consider how these hurdles could be overcome and conclude with what a product would look like in the Italian context, including simulations of account balances and costs.
This paper investigates the impact of secondary school tracking on students' transitions to higher education (HE) in Italy. Using data from INVALSI and PISA surveys, we explore how track allocation - whether students attend academic, technical, or vocational schools - affects their academic outcomes and aspirations for higher education. There are significant disparities in transition rates between tracks, with students from vocational schools facing lower prospects of accessing higher education compared to their peers in academic tracks. These students not only demonstrate weaker skill growth over time but also lower aspirations for college, exacerbated by selective university admission policies based on standardized testing. The findings suggest that tracking reinforces social inequalities, with vocational students experiencing lower probabilities of entering tertiary education, especially under selective university admission policies. Revising vocational curricula, postponing track selection, or adjusting admission processes are policy measures that could improve equity in higher education access. Targeted interventions to support students in vocational tracks might also be needed to mitigate the long-term consequences of early academic tracking.
This paper explores the potential misperception of costs and benefits associated with tertiary education, influencing decisions to pursue higher education and field selection. These choices hold significant socio-economic and gender connotations, prompting an exploration of potential reasons for suboptimal choices and a discussion on the disparities observed at the group level. We present empirical evidence on the determinants of higher education (HE) enrollment and field of study choice, considering factors that might contribute to a misperception of costs and benefits. We also examine, using INVALSI data on the universe of Italian students attending the last year of upper secondary school, the influence of teachers in shaping students' choices through the grading process. More precisely we analyze whether teachers grade less generously students coming from a weaker socio-economic background and females. Lastly, we explore the positive impact of information provision interventions on educational decision-making.
Traditional assessments of learning outcomes through test scores provide an incomplete understanding of individuals' readiness to thrive in today's diverse and dynamic world. In this paper, we discuss the ongoing efforts to move towards a more holistic assessment of students and education systems, which embraces a set of socio-cognitive skills that fall under the umbrella of << global competencies >>. Using data from the 2018 OECD PISA Assessment, we study the factors that are associated with global competencies among European students, and how these competencies relate to their educational trajectories and career ambitions. We start with a set of cross-country comparisons and then narrow our analysis at the student-level, through a pooled country fixed-effect model. We highlight three core results. First, we show that global competencies vary substantially across countries, but are poorly correlated with standard country-level factors typically associated with education such as GDP per capita, immigration rate, and student achievements. Second, we show that students' socio-economic and cultural backgrounds are strongly associated with global competencies, while the school environment plays only a minor role, suggesting that current educational systems have not fully integrated these skills into their programs. Third, we show that global competencies are associated with desirable outcomes such as students' transition to higher education and better occupational status.
