How Pandemic Shock Affects Claim for Minimum Income Measures

Social transfers, and minimum income schemes in particular, are key tools to support people’s income and protect their living standards, especially in times of crisis. This paper aims to understand how the claiming of social benefits changed in response to the biggest crisis of recent years, i.e. the pandemic shock. In particular, we test whether the pandemic has reduced the transaction costs associated with claiming social transfers, increasing their spread across the population even controlling for recent recessive trends. We focus on Italy as an interesting case study, because it was the first Western country to be strongly affected by the Covid-19 pandemic and the latest EU country introducing a national minimum income scheme (the Reddito di Cittadinanza or RDC). Based on a rich dataset of statistics at NUTS-3 regional level, results show a significant and positive correlation between the spread of RDC recipients and the one of Covid-19 contagions, especially during the first stage of pandemic. This evidence confirms that lockdown measures strongly affected the economic wellbeing of households and, in turn, transaction costs associated with the RDC claim. Main results hold when relevant demographic and socioeconomic variables directly influencing the RDC claim are considered.