The Geography of the Italian Citizenship Income: The Role of Poverty and Inequality in Determining Spatial Heterogeneity Across the Italian Municipalities

Abstract This paper evaluates the influence of poverty and inequality on the distribution of the Italian Citizenship Income Policy aimed at supporting poor and in-need Italian households. We implement a variety of spatial econometric models that relate the number of households benefiting from income support interventions with local well-being indicators, including the average per capita income, the share of poverty, and the Gini index. These models account for the strong spatial heterogeneity exhibited by the recipient households by grouping municipal units into homogeneous and spatially contiguous groups and estimating local relationships. In this way, we evaluate how geographical and local factors have influenced the coverage of the policy. The results show that both poverty and inequality were relevant drivers of the geographical distribution of participation in income support. However, the sign and magnitude of the estimates depend on local structural characteristics. We estimate positive and statistically significant correlations with respect to per capita income and the share of municipal poverty, with particular interest in areas in which both high socioeconomic weakness and low-income levels persist. Conversely, we observe that where both average per capita income and income inequality were high, the policy was unable to reach potential household targets, while in areas characterized by low income but with lower income inequality, the income support reached a high number of households. We also noted the complexity of the socioeconomic situation in Italy, marked by a growing spatial heterogeneity throughout the period of interest, probably enforced by the outbreak of the COVID-19 pandemic.