The Hidden Side of Pension Reforms: Telling a different story about the ‘Italian pension state’

Pension reforms are one of the usual subjects of case studies and comparative analyses. Their evolution has been analysed to shed light on stability and change of welfare institutions and to assess the long-term sustainability and adequacy of old age programmes. This is also the case of Italian pensions: they represent both the typical case of sticky institutions where path-dependency is evident, and a policy area that has seen a lot of innovation in the last decades.

While much of the analysis of the Italian pension reforms has focused on public spending and the attempts for cost-containment, the present paper looks at the ‘hidden’ side of the reform process: the one related to the system’s revenues.  In the last decade, much debate has in fact focused on the heavy burden represented by payroll taxes on the economic competitiveness of the country and the need to revise the pension system’s financing.

Taking stoke of two decades of reforms, the paper sheds light on both stability and change of the mechanisms for financing public pensions and supplementary schemes in Italy. Fiscal concerns have plaid a key role in shaping the political debate and the reforms actually implemented.