The Italian welfare state in comparative perspective: beyond continuity?

The debate whether Italy is an outlier or a latecomer date back to the first comparative studies on welfare state development in Europe (Flora et al., Reference Flora1986; Esping-Andersen, Reference Esping-Andersen1990). In the early 1990s, the seminal Esping-Andersen's (Reference Esping-Andersen1990) typology of welfare regimes treated the Italian case as a rudimental and less developed – that is, a latecomer – version of the conservative–corporatist regime that characterized Continental European countries – primarily Germany and France.

However, broadening the comparative and the analytical scope of the welfare regime theory, later contributions highlighted the peculiar features of the Southern European welfare model (Ferrera, Reference Ferrera1996; Ferragina et al., Reference Ferragina, Seeleib-Kaiser and Spreckelsen2015). Two main properties originally set apart the latter from welfare state arrangements in the other three worlds of welfare capitalism – social democratic (Nordic), conservative–corporatist (Continental) and liberal (Anglo-Saxon): an unbalanced allocation of resources among the various welfare state sectors, the so-called functional distortion favouring pensions vis-à-vis social assistance, labour market and family policies; (b) an uneven distribution of resources among different social groups – so-called distributive distortion – to the advantage of insiders vs. outsiders and mid-siders. The lack of a minimum income scheme and underdeveloped social services (for children, households and frail elderlies) were key features of the model. As corollary, the family persistently played a key role as welfare provider along the Southern rim (Saraceno, Reference Saraceno1994; Ferrera, Reference Ferrera1996), once again in contrast with de-familiarized (or de-familiarizing) welfare states in Central-Nordic and Anglo-Saxon Europe. Quite interestingly, Italy was the country that fitted this model the most: in fact, the remarkable functional distortion partly distanced the Italian (and the Greek) welfare state from the neighbouring systems of Spain and Portugal, where the distribution of expenditure between old age and labour market risks was more balanced.

Table 1 clearly shows that, in the mid-1990s, Italy was an outlier along the functional dimension, both overspending in the old age sector and substantially underspending in other relevant welfare functions such as unemployment, family and children, and social exclusion.

Table 1.

Social policy expenditure by function in Italy, selected years (1995–2020)

Source: Eurostat online database.

Importantly, however, Table 1 also shows a process of gradual convergence between the mid-1990s and 2020 in terms of welfare expenditure distribution across policy fields, with a relevant reduction in the gap between Italy and the EU15 average in pension spending (−11.9 percentage points, p.p.) and in unemployment policies (−3.3 p.p.) – whereas the trend is less evident for the functions family and children (−0.2 p.p.) and social exclusion (+0.5).

Two overarching questions follow. First, can we actually detect, in EU-15 comparative perspective in 1992–2022, a process of convergence (i.e. Italy going mainstream) which has affected not only expenditure trends but also the institutional features of Italian welfare and employment policies, or Italy has rather remained an outlier? Second, how can we explain these dynamics?

In order to address the first research question, we need to analytically identify which policy trajectories (Table 2) could contribute to the ‘mainstreaming’ process in those areas of social policy that have most contributed to the functional and distributive distortions mentioned above: old age pensions, labour market policies, social assistance benefits and social services.Footnote ¹ In brief, we argue that being old-age pensions generally the most expensive social policy field in Italy, for the Italian welfare state to get closer to the European model the policy trajectory in this sector should be mostly characterized by retrenchment, most likely associated with an increasing role of private welfare providers (privatization). In labour market policy, the Italian model was traditionally characterized by a regulation deeply geared towards job-security and employment protection, an underdeveloped as well as fragmented system to tackle unemployment, and very low investment in active labour market policy (ALMP) (Jessoula and Vesan, Reference Jessoula, Vesan, Clasen and Clegg2011). Accordingly, getting closer to European standards in this policy field would imply pursuing labour market deregulation (flexibilization) coupled with the expansion of ALMPs and reforms aiming to increasing both the inclusiveness and the generosity of unemployment benefits. Finally, social assistance monetary benefits (both minimum income schemes and family benefits) and in-kind services for households and children traditionally lagged behind, while they constitute two main components of the ‘social investment paradigm’ to which most European countries turned in the last three decades to comply with the challenges of ‘knowledge economies’ (Hemerijck and Ronchi, Reference Hemerijck, Ronchi, Béland, Morgan, Obinger and Pierson2021): for these reasons, going mainstream would require expansion in these policy sectors.

Table 2.

Italian welfare state ‘going mainstream’

To address the second research question – specifically, which factors might drive these dynamics of social policy change – the literature over the past three decades has primarily focused on the transformation of class politics and the growing influence of the European Union. As to the latter, on the one hand, the deepening of European integration and the fiscal constraints associated with the Maastricht criteria have constituted a hard and indirect external pressure to contain social policy expenditure, in particular in a heavily indebted country such as Italy (Graziano and Jessoula, Reference Graziano, Jessoula, Graziano, Jacquot and Palier2011; de la Porte and Heins, Reference De la Porte and Heins2015). On the other, the so-called European social governance, elaborating a specific social policy agenda aimed to promote outcome convergence among domestic welfare systems through soft law and the European Semester applies a soft and direct pressure to adapt national welfare states (Graziano and Jessoula, Reference Graziano, Jessoula, Graziano, Jacquot and Palier2011), stimulating member states to adopt social investment policies (Ferrera, Reference Ferrera2017). Combining ‘hard’ pressure to contain expenditure (and retrench pensions) and ‘soft’ incentives to expand social investment services, the EU could be a driver of the (supposed) ‘mainstreaming’ of the Italian welfare state.

Many, however, have argued that in order to fully understand how EU integration and European social governance influence (social) policy change at the national level, domestic politics has to be included in the interpretative framework (Graziano, Reference Graziano2011; Jessoula, Reference Jessoula2015). Indeed, a growing body of comparative welfare state literature has focused on the transformation of class-based electoral politics to explain recent social policy changes in Europe (Gingrich and Häusermann, Reference Gingrich and Häusermann2015; Häusermann et al., Reference Häusermann, Pinggera, Ares and Enggist2022). Since the mid-1980s, centre-left parties in the West have shifted towards the ideological centre, moving away from traditional leftist positions. Declining influence of trade unions and occupational change contributed to these dynamics: the shrinking industrial workforce, the growth of atypical employment and the ever more fragmented situation of working-class constituencies have undermined the traditional support base of centre-left parties. To increase their programmatic appeal among the expanding group of educated middle-class voters – particularly high-skilled employees in interpersonal service occupations (Gingrich and Häusermann, Reference Gingrich and Häusermann2015) – these parties had strong incentives to shift preferences from traditional social compensation measures towards social investment-oriented policies (Abu-Chadi and Wagner, Reference Abu-Chadi and Wagner2019). If these dynamics took place in Italy, they could contribute explaining the mainstreaming process hypothesized above. In a nutshell, a more ‘centrist’ social policy agenda of the main centre-left party combined with declining relevance of the traditional defenders of social policy status quo – that is, trade unions – might ‘push’ the Italian welfare state closer to European standards, by making retrenchment more likely in costly social insurance schemes – pensions in particular – and, thus, ‘freeing’ resources to be invested in less developed welfare areas (family benefits, social services and minimum income schemes).

However, while providing important insights to explain welfare state change in Nordic and Continental Europe, the thesis of the ‘transformation of the left’ faces some limitations when it travels along the Southern rim. The growing significance of highly skilled middle-class constituencies in advanced capitalist societies is less pronounced in Southern Europe, where low-skilled (manual) workers continue to represent important electoral constituencies, alongside small business owners and the self-employed (Bulfone and Tassinari, Reference Bulfone and Tassinari2021; Branco et al., Reference Branco, Miró and Natili2024). Moreover, recently, scholars have questioned both the declining relevance of social partnership in shaping welfare state transformations and the (immutable) ‘pro-insider’ orientation of trade unions in Mediterranean countries (Durazzi, Reference Durazzi2017; Natili and Puricelli, Reference Natili and Puricelli2023).

To address the limitations of these approaches, we argue that it is particularly promising to ‘bring back’ key insights from competitive democratic theory and theories of political exchange between interest groups and political parties (Pizzorno, Reference Pizzorno, Crouch and Pizzorno1977; Stoppino, Reference Stoppino2001; Molina and Rhodes, Reference Molina and Rhodes2002). Our argument unfolds in two key steps. First, we argue that the presence of social actors advocating for investment in traditionally neglected social policy areas is crucial for overcoming path-dependent dynamics in mature welfare states (Pierson, Reference Pierson1994) and effectively reorienting welfare spending both in distributive and functional terms. Interest groups play a vital role in identifying emerging (social) problems and aggregating citizens’ preferences by developing specific policy proposals. As such, they are essential in securing political recognition of (new) social risks and steering political parties' and governments' welfare priorities in previously ignored areas.

However, this alone is insufficient. We argue that, especially in highly indebted countries, a key precondition for transforming mature welfare states is the emergence of political parties that challenge the austerity consensus and overarching ‘neo-liberal’ paradigm. After the end of the Cold War, most European countries, including Italy, experienced a progressive ideological convergence towards the acceptance of neo-liberalism (Conti, Reference Conti2008; Schmidt and Thatcher, Reference Schmidt and Thatcher2013; Ferragina and Arrigoni, Reference Ferragina and Arrigoni2021). The rise of new parties contesting such consensus and prompting new political competition dynamics could help shift welfare reforms from cost-containment to expansion – as outlined above, an essential component of the broader strategy to ‘mainstream’ the Italian welfare state.

These two mechanisms are clearly interconnected and dynamic. Rather than focusing exclusively on one side of the political process, we argue that it is essential to examine the interactions between political supply and ‘sociopolitical demand’ – which includes both voters and interest groups – and how both filter external pressures. This approach allows us to capture the mutual relationships among changing social needs, voter behaviour, interest group positioning and mobilization strategies, party dynamics and supply-side (welfare) responses.

1992–2015: The Second Republic and the uneven transformation of the Italian welfare state

At the beginning of the 1990s Italy underwent a severe economic and political crisis: while the party system disintegrated under the impact of the Bribe city scandal (1992–1993), the 1992–1995 phase was marked by intense instability of exchange rates, currency devaluation in the run-up-to-Emu, economic recession coupled with two-digit unemployment rates and, for the first time since decades, a decline in employment rates.

As noted by a broad literature, subsequent governments adopted a series of harsh fiscal stabilization measures, which also included relevant reforms especially in the two key areas of pensions and labour market policies. The direction of reform is indeed clear, especially in the pension field, where a number of reforms combined retrenchment and re-structuring (i.e. multipillarization) measures with re-financing interventions. The major shift to a Notional Defined Contribution system (NDC) in particular implied increased regulatory harmonization across the main occupational categories and a sharp reduction of pension levels. The latter was the result of thorough concertation between a technocratic cabinet and the social partners that ultimately safeguarded older workers' and retirees' ‘acquired rights’ – that is, the core trade union membership (Natili and Jessoula, Reference Natili and Jessoula2019: 347).

In the area of employment policy, in 1996 the tripartite agreement signed by the new centre-left government triggered a shift towards a more flexible and deregulated labour market and it was then transposed into the ‘Treu reform’ (Berton et al., Reference Berton, Ricchiardi and Sacchi2009). As in many other European countries, labour market flexibilization occurred ‘at the margin’, that is through the promotion of atypical employment mostly directed to new entrants in the labour market. Dismissal rules for workers on open-ended contracts were not changed due to resistance by trade unions: same as in pensions, workers organizations' key constituency (the insiders) were not affected by the reform. In 2003, another reform (L. 30/2003) was adopted by the centre-right government: it prompted a more comprehensive flexibilization of the labour market, abolishing the restrictions on the use of different types of atypical contracts, but still leaving unchanged the level of job protection for standard workers.

In the subsequent years the share of atypical jobs expanded, also contributing to employment growth in Italy (Berton et al., Reference Berton, Ricchiardi and Sacchi2009). Meanwhile, between 1993 and 2007, unemployment benefits became more generous in terms of replacement rates and benefit duration (Jessoula and Vesan, Reference Jessoula, Vesan, Clasen and Clegg2011): however, the overall ‘recipiency rate’ (i.e. the share of unemployed entitled to benefits) remained low compared to other European countries (Berton et al., Reference Berton, Ricchiardi and Sacchi2009). In particular, the growing share of atypical workers had no access to any kind of income protection due to the strict eligibility conditions in ordinary unemployment insurance, whereas labour market entrants and long-term unemployed suffered from the enduring absence of a minimum income scheme.

Despite such gaps of the income protection system, precariousness and other relevant policy issues, such as poverty, female and youth emancipation remained mostly outside the political agenda. Only in the late 1990s, the centre-left Prodi government tabled timid initiatives to improve anti-poverty and child benefits and services. These measures introduced noteworthy innovations aimed at reducing the imbalances in the Italian welfare state. However, they were underfunded, and the subsequent Berlusconi government halted this expansionary path in social assistance and family policies.

Overall, it is clear from the above reconstruction that between 1990 and 2007 the tightening of the EU integration process contributed to the adoption of retrenchment reforms (Ferrera and Gualmini, Reference Ferrera and Gualmini2004). On the one hand, the combination of budget constraints included in the Maastricht Treaty (i.e. hard and indirect pressures) and financial market pressures triggered the shift to cost-containment reforms in pensions. On the other, the construction of the European Monetary Union (EMU) – ruling out the possibility to rely on ‘competitive devaluations’ as in previous decades – put Italian policymakers in a stark dilemma: either competing by investing in human capital and skilled labour in a high value-added economy or rather pursuing labour market flexibilization also as a mean to reduce labour cost. The choice fell on the latter. In fact, external pressures were filtered by domestic political dynamics, and although the politics of reform (both labour and pension) became more contentious in the early 2000s, the centre-right and centre-left blocs largely agreed on the main reform objectives – labour market flexibilization, pension system retrenchment and partial privatization. Both sides fully endorsed the dominant neoliberal mainstream paradigm, thereby converging with most other EU countries. In this context, the key factor for the adoption of subtractive reforms was the support by trade unions (or at least their acquiescence). Negotiation, and also concertation, with labour (and employers) organizations had effects on the content of reforms, which were mostly shaped in accordance with unions’ interests, safeguarding the acquired rights of older workers and retirees – that is, the core trade union membership (Natili and Jessoula, Reference Natili and Jessoula2019; Ferragina and Arrigoni, Reference Ferragina and Arrigoni2021). As consequence of these processes, the labour market got closer to that of other European (Continental) countries, where flexibilization at the margin – and ensuing dualization – became the main solution to the emerging challenges of post-industrial economies (Emmenegger et al., Reference Emmenegger, Häusermann, Palier and Seeleib-Kaiser2012). In the field of pensions, austerity reforms complemented by voluntary privatization became the key currency of reforms for the whole period 1992–2007, thus launching the transformation of the Italian pension system towards a multipillar architecture earlier than similar European countries (Germany, France, Austria; see Jessoula, Reference Jessoula2009).

For the Italian welfare state to become fully mainstream, it would have required an expansion of anti-poverty measures, family benefits and human capital-enhancing services. However, in these areas, EU soft pressures were less effective, and inertia prevailed (Naldini and Saraceno, Reference Naldini and Saraceno2008; Natili and Jessoula, Reference Natili and Jessoula2019). Right-wing parties opposed changes in these fields, actively supporting the traditional familistic welfare model to please their moderate and conservative base (Léon et al., Reference León, Pavolini, Miró and Sorrenti2021) and avoid challenging the role of traditional institutions, such as Church associations and families, as welfare providers (Natili, Reference Natili2019). While centre-left parties were more open to investing in these ‘new’ sectors, they focused much of their political capital on defending pension rights for stronger labour market groups, also because neither social nor religious actors backed the expansion of these underdeveloped areas (Lalioti, Reference Lalioti2016). As a result, no significant growth in social investment benefits or services occurred, and Italy remained an outlier in these domains (Ronchi and Vesan, Reference Ronchi, Vesan, Garritzmann, Häusermann and Palier2022).

The financial and economic crises hit Southern Europe harder than other parts of Europe. Between 2008 and 2014, Italy saw exceptional increases in severe material deprivation (+4.1 p.p.), absolute poverty (+3.9 p.p.) and youth unemployment (+16.3 p.p.) compared to other countries. Given this context, one might have expected a greater-than-average rise in social spending due to the welfare state's automatic stabilizing effects. However, the reality was starkly different, as social policy expenditure in real terms in Italy and other Southern European countries drifted apart from the rest of the EU (Natili and Jessoula, Reference Natili, Jessoula and Greve2022).

This is mainly because Mediterranean countries introduced severe ‘structural’ reforms pursuing retrenchment practically in all social policy fields, following requests from EU institutions and powerful external pressures by financial markets (Pavolini et al., Reference Pavolini, León, Guillén and Ascoli2015; Sacchi, Reference Sacchi2018). The technocratic Monti government (2011–2013) and those of Enrico Letta (2013–2014) and Matteo Renzi (2014–2016) represented a watershed both for the Italian welfare state, employment policies and the relationship between governments and trade unions. Pension reforms were included in three main ‘austerity packages’ adopted by the centre-right Berlusconi government (so-called Sacconi reforms) and by the technocratic Monti cabinet (Fornero-Monti reform). Differently from what had occurred in 1990s–2007, the radical and swift changes of pension rules during the Great Recession turned pension reforms, for the first time, against the core constituency of trade unions (Natili and Jessoula, Reference Natili and Jessoula2019: 350). Also employment policy reforms in 2012 and 2015 also turned against the interests and strategies of trade unions (Natili and Puricelli, Reference Natili and Puricelli2023). In particular, the so-called Jobs Act further liberalized the labour market by dismantling Article 18 of the Workers’ Statute, which granted full reinstatement in cases of unfair dismissal for firms employing more than 15 workers. Flexibilization was thus no more pursued only ‘at the margin’, but rather through a thorough reduction of workers' rights which also affected employees hired (after 2015) on standard open-ended contracts (Natili and Puricelli, Reference Natili and Puricelli2023). Labour market reforms also entailed the expansion of unemployment benefits especially targeting labour market mid-siders and outsiders, thus increasing inclusiveness (Sacchi, Reference Sacchi2018). Overall, both pension and labour market policies were characterized by deep and intense reforms that made the Italian welfare system less of an outlier than before. That said, the extremely rapid implementation of the new eligibility requirements for retirement constitutes an unicuum in the European context – and a radical change compared with the extremely long phasing-in periods of the reforms adopted in the 1990s.

Despite alarming poverty rates, no social policy areas experienced ‘expansion’ in the immediate aftermath of the financial and economic crises. Minimum income protection remained fragmented, underfunded and rudimentary (Saraceno et al., Reference Saraceno, Benassi and Morlicchio2020). Family benefits, childcare provision, social services and ALMPs faced a similar fate. Overall, limited investment in human capital enhancing services, reconciliation measures and in non-contributory benefits contributed to make Italy – if possible – even more of an outlier in comparative terms (Ronchi and Vesan, Reference Ronchi, Vesan, Garritzmann, Häusermann and Palier2022; see Table 1).

This policy trajectory had significant social and political consequences. The structural weaknesses of the labour market and the shortcomings of Italy's social protection system exacerbated social problems, with material deprivation and absolute poverty rising dramatically – even compared to other Southern European countries like Spain and Portugal. Precarious employment also became widespread (Girardi, Reference Girardi2023). Nevertheless, the main political parties as well as traditional pro-welfare interest groups – most notably the three confederal trade unions – failed to recognize and propose innovative policy solutions to these pressing social problems. Actually, with the former – especially centre-left parties – forming ‘technocratic’ and/or ‘national unity’ governments to implement the austerity reforms promoted ‘from above’ (i.e. from Brussels), the latter remained almost without political ally in the political arena.

Against such backdrop, initially trade unions failed to occupy new social and political space. Pressing issues such as minimum income protection, precarity, reconciliation policies and family benefits remained marginal in their agenda, as well as in the political arena. However, already in this phase, new actors aiming to challenge this status quo emerged both on the demand and the supply side. More radical trade unions like Cobas and USB, social movements, large-scale NGOs and associations raised new demands in the social policy arena, mobilising the poor and atypical workers and their growing concerns with income security (Natili and Puricelli, Reference Natili and Puricelli2023: 349). On the supply side, the rising 5SM had among its top proposals the introduction of an anti-poverty benefit which would have clearly benefitted the outsiders, the Reddito di Cittadinanza (Citizenship Income, RdC). But the Italian party system was affected by another important change with (also) relevant welfare implications, since the (previously Northern) League (L) gradually modified its ideological underpinning, shifting from a territorial, regionalist party to a political force with a national and ‘sovereign’ vocation and clearly adopting an ‘exclusionary welfarism’ approach in social policy (Jessoula et al., Reference Jessoula, Natili and Pavolini2022): as such, the renovate League started claiming against many of the austerity reform introduced in Great Recession phase, particularly in field of pensions. These changes in both socio-political demand and political supply, which also exploited the diffused anger against traditional partisan and corporatist players which were accused of having disregarded important social claims for roughly two decades, are key to understand the remarkably different policy developments and underpinning political dynamics in the subsequent (2016–2022) phase.

After the storm: back to credit-claiming welfare politics, resurgence of expansionary distributive policies

Two decades of neoliberal welfare reforms contributed to both significant retrenchment in the field of pension and across-the-board liberalization of the labour market – thus infringing the two ‘acquired rights’ par excellence of the Italian social protection system: old age benefits and labour market protection for the so-called insiders. Retrenchment was not compensated, however, with expansion in the comparatively underdeveloped policy fields. This had important repercussion, since citizens perceived drastic reductions in the traditional rights on which social citizenship rested in the Fordist age without significant improvements in protection from the new social risks typical of a post-industrial society. Put differently, in the critical social conditions that materialized during and after the Great Recession, affected (key) interests on the one hand and disregarded stances on the other were key propellers of the new politics of welfare which was going to emerge in subsequent years.

In fact, political reactions followed soon, when voters, parties and interest groups started to react to the changed social landscape. In the ballot box, citizens began to reward the new political actors which explicitly challenged the austerity framework by proposing expansionary reforms, especially in labour market and anti-poverty policies (the 5SM), pensions (the League) and family policies (both the League and later even the right-wing Brothers of Italy). Meanwhile, in the group arena, novel and indeed unprecedented advocacy coalitions emerged – the Alliance against Poverty, the Alliance for Childhood, the Pact for dependent individuals, the Italian Alliance for Sustainable Development (ASviS), Forum on Inequality and Diversity (ForumDD) – and elaborated detailed policy proposals, effectively exerting political pressure on parties and governments to provide responses to emerging social issues. Importantly, such changes in political supply and socio-political demand occurred at a time of increased volatility, not only in electoral behaviour (i.e. party-voter linkages), but also in the party-interest group alignment, especially on the left side of the political spectrum after the rupture of the decennial alliance between the main centre-left party PD (Democratic Party) and the main trade union CGIL.

In such more fluid political environment, the salience of previously neglected policy fields increased, first in the field of anti-poverty policies. Also prompted by the dramatic increase of poverty as well as the full transition to a post-industrial labour market outlined above, confessional organizations (Caritas and Acli) and trade unions substantially reshuffled their policy priorities and joined forces by creating a new actor – the Alliance Against Poverty – committed to the establishment of a national minimum income scheme and able to contribute with a detailed policy proposal drafted by policy experts (the so-called ‘Social Inclusion Income’: Gori et al., Reference Gori, Baldini, Martini, Motta, Pellegrino, Pesaresi, Pezzana, Sacchi, Spano, Trivellato and Zanini2016). The formation of such a wide pro-poor support coalition marked a watershed, leading to the joint signature of a ‘Memorandum’ by the new PD led Gentiloni government (2016–2018) and the Alliance, and the subsequent introduction of the Inclusion Income (REI) (Natili, Reference Natili2019). To be noticed, a notable faction of the Democratic Party, including its secretary, largely opposed expanding minimum income protection, leading to limited political investment in the measure (Vesan and Ronchi, Reference Vesan and Ronchi2019). As a result, in comparative terms, REI was one of the least protective anti-poverty schemes in Europe (Jessoula and Natili, Reference Jessoula and Natili2020). Although modest, the introduction of the first national MIS was an attempt by traditional centre-left parties to gain support from the numerous groups (over 30, representing around 15 million people) in the Alliance Against Poverty, and a cautious response to the electoral challenge posed by the 5SM.

Novel competitive and political exchange dynamics also invested a traditional welfare sector such as pensions. Actually, after two decades of substantial pension retrenchment, since 2016 pension policies made a U-turn. The new wave of reforms began with the introduction of the so-called Ape (Anticipo finanziario a garanzia pensionistica) aimed at relaxing eligibility requirements for early retirement and providing support to low-income pensioners.

Interestingly, with respect to underpinning political dynamics, these reforms must be interpreted in light of the novel competitive challenge posed by the League as well as the PD-CGIL rupture on the centre-left. The adoption of micro-distributive expansionary measures aimed to partially reverse the severe retrenchment reforms adopted in 2009–2011 was in fact functional, for the PD and other centre-left parties, to re-gain consensus among their traditional constituency of trade union members, also in the attempt to de-activate the challenge from the right – the League claiming for a repeal of the 2011 Fornero reform – as well as the 5SM.

Nonetheless, neither the introduction of REI in the sector of anti-poverty benefits – where the most relevant policy change was indeed yet to come – nor two subsequent expansionary pension reforms (2016–2018) allowed established centre-left and centre parties to avoid a dramatic defeat in the 2018 political elections. These actually represented an earthquake for the Italian party system and a stark success for the 5SM, which became the first party in terms of votes remarkably outperforming the Democratic Party.

Shortly afterwards, the Conte I Government (M5S-The League) replaced the REI with the Citizenship Income (RdC). The latter was more generous and protective – overall, more similar to the minimum income programs in place in Continental and Nordic countries – although not for migrants (Jessoula and Natili, Reference Jessoula and Natili2020). The new government also strengthened the ‘workfare’ activation profile of the anti-poverty benefit, investing additional and relevant resources for ALMPs. Along with the introduction of the RdC, the ‘yellow-green’ government introduced the so-called Citizenship Pension, a new means-tested benefit for low-income pensioners, along with ‘Quota 100’, reaffirming the expansionary trend in pensions initiated by the previous government. Furthermore, it adopted a labour market reform – the so-called ‘Dignity decree’ – which constituted a (admittedly timid) reversal of the 2015 Jobs Act by reducing the maximum number of renewals for temporary contracts and marginally increasing the monetary compensation in cases of unfair dismissal for open-ended contracts. Overall, these welfare reforms constituted significant changes compared to the pattern of social and labour market policies that had characterized the previous decades (Bulfone and Tassinari, Reference Bulfone and Tassinari2021; Guardiancich et al., Reference Guardiancich, Madama and Natili2023).

This period also saw significant changes in family policies, breaking decades of institutional and political inertia (Madama and Mercuri, Reference Madama and Mercuri2023). Importantly, also this policy field was characterized by the emergence of a new collective actor campaigning for policy expansion, the Alleanza per l'infanzia (Alliance for Children, AfC), created in 2019, gathering the most relevant civil society organizations, the main trade unions and a number of well renewed experts in this policy field. Between 2020 and 2022, the main innovations were adopted by the ‘yellow-red’ (M5S-PD and other centre-left parties) Conte II government and the subsequent technocratic national unity government headed by Mario Draghi. Changes concerned all the three core areas of family policy, as repeatedly requested by the AfC: parental leave – through the further extension of compulsory paternity leave, in line with the requirements of the 2019 EU directive on work-life balance (Directive [EU] 2019/1158); child allowances, with the introduction of the Assegno unico e universale (single universal allowance); childcare services, thanks to the investment (originally) planned within the framework of the National Reform and Resilience Plan. Beyond the pressure of the AfC, in the electoral arena, the ‘new’ League – and Brothers of Italy too – contributed to turning the politics of welfare towards expansions, advocating for reforms and investment in this policy field. Although these parties frame and envisage investment in family policies very differently from centre-left groups – with the focus being on ‘pro-natalist stances’ rather than on ‘gender equality’ issues – they contributed to overcome the multiple barriers that traditional right-wing parties in Italy put to limit developments in this policy area, ultimately allowing the emergence of a cross-party ‘ambiguous’ agreement in this once contentious policy field (Madama and Mercuri, Reference Madama and Mercuri2023).

To sum up, in this phase, significant changes affected welfare state policy and politics. Both pension and labour market policies, after three decades of cost-containment reforms and labour market de-regulation changed (unexpectedly) direction, and micro-distributive expansionary and re-regulatory interventions at the margin appeared. Given the breadth of liberalising interventions in the previous decades, however, the latter interventions have not led the Italian welfare state outside the ‘European track’ (see Table 2). Even more relevant, welfare expansion characterized anti-poverty and family benefits as well as (on paper) social investment services, that are the policy fields where inertia had prevailed since the outset of the First Republic.