Who Benefited Most From the Reddito di Cittadinanza? Evidence on Poverty and In-work Poverty in Italy

Social cash transfers have been expanding across Europe, though Italy has been slower to adopt such measures. In recent years, however, Italy has introduced several transfer schemes to address rising poverty and social exclusion—most notably the Reddito di Cittadinanza (RdC), recently replaced by the Assegno di Inclusione (ADI). This paper contributes to the ongoing debate on the effectiveness of cash transfers by evaluating the effect of RdC on absolute and relative poverty incidence and gap, as well as in-work poverty. Using data from the Bank of Italy’s Survey on Household Income and Wealth (SHIW) for 2020 and 2022, we apply descriptive statistics, a probit and tobit analysis to assess changes excluding and including the RdC. Our findings show that RdC significantly reduces both absolute and relative poverty but has no significant effect on in-work poverty. Further heterogeneity analysis reveals that the impact of RdC varies across different population groups.