The enigma of the two forms of poverty in Italy

But in Italy, has poverty increased or decreased? The answer to such a simple question is by no means straightforward, and the most accurate response is: it depends. This is because Istat essentially provides us with two poverty indicators that measure different things but, above all, paint two very different pictures. According to one, poverty has increased over the last ten years. According to the other, on the contrary, it has decreased. The first index, published two days ago by Istat and widely reported in the press, is that of absolute poverty. According to the latest estimate, relating to 2025, there are 2.1 million households living in absolute poverty, totalling 5.4 million individuals. The figure is down slightly but remains broadly stable compared with 2024, both in absolute terms (there were 2.2 million poor households and 5.7 million individuals) and in percentage terms (the proportion of poor households fell from 8.4 per cent to 8 per cent, and among individuals from 9.8 per cent to 9.3 per cent). These figures have remained broadly stable since 2020, the year of the Covid-19 pandemic, when there was an increase of around one million people living in poverty, ranging from 2 to 2.2 million households and 5.4 to 5.7 million individuals. If we broaden the perspective to the last ten years, however, there has been a significant increase from 6.4 per cent to 8 per cent for households and from 7.4 per cent to 9.3 per cent for individuals (an increase of half a million and one million respectively). If, on the other hand, we consider the other set of indicators – also from Istat – which measure income and material living conditions in line with European standards, then the picture over the last ten years is substantially different: poverty has gradually declined. (Capone continues on page four)

According to the latest Istat survey, in 2025 the proportion of the population at risk of poverty or social exclusion fell to 22.6 per cent from 23.1 per cent in 2024; the proportion of individuals at risk of poverty fell from 18.9 per cent to 18.6 per cent; the proportion of individuals living in low-work-intensity households fell from 9.2 per cent to 8.2 per cent; whilst the number of people living in conditions of severe material deprivation rose from 4.6 per cent to 5.2 per cent. The reduction in poverty is more significant when viewed over the last decade: the proportion of people at risk of poverty fell from 19.9 per cent to 18.6 per cent; those experiencing severe material deprivation fell from 12.1 per cent to 5.2 per cent; those in low-work-intensity households fell from 11.2 per cent to 8.2 per cent; finally, those at risk of poverty or social exclusion – the group comprising those in at least one of the three previous categories – have fallen from 28.4 per cent to 22.6 per cent: a reduction of one fifth.

One form of poverty is rising whilst the other is falling – how is this possible? The answer lies in the fact that poverty is a complex and multidimensional phenomenon and, therefore, different tools are needed to measure it. The two surveys measure poverty through two different aspects – consumption in one case and income in the other – and are based on different samples, which consequently produce results that are not comparable. The fundamental distinction is therefore between an indicator of ‘relative poverty’, which identifies a poverty threshold based on income, and an indicator of ‘absolute poverty’, which instead identifies the poverty threshold based on consumption – that is, the cost of a basket of essential goods and services.

The first approach, the income-based one, which measures so-called ‘relative poverty’ and the risk of poverty, is the method adopted by the European Union and allows for comparisons between countries via Eurostat. It is also the set of indicators that shows a decline in poverty in Italy over the last decade. As mentioned, there are relative poverty indicators compared to the national average, but there are also absolute indicators, such as the index measuring ‘severe material deprivation’ (not being able to afford a car, not being able to heat one’s home adequately, being unable to pay bills, being unable to consume sufficient amounts of meat, etc.).

In addition to this method, which is used across Europe, Istat calculates an ‘absolute poverty’ indicator which, as mentioned, uses the cost of a basket of goods and services deemed essential as the threshold; the monetary value of this basket varies according to the number of family members and the cost of living in the area of residence: anyone with an income below the cost of the basket is considered poor. This indicator, as mentioned, exists only in Italy: attempts have been made to produce a similar common indicator at European level, but this has not been possible due to a lack of consensus on the operational methods of the tool.

The impression is that the ‘Italian’ indicator is showing little reaction to the profound changes that have taken place in the economy. For example, over the last decade, welfare spending on the poorest households has increased significantly (from the Rei-Rdc-Adi to the Universal Child Allowance, in addition to tax reforms that have cut taxes for those on low to middle incomes), and two million more people have entered the labour market, all on permanent contracts, with a sharp rise in the south and amongst women. Despite this, absolute poverty has risen. Perhaps other factors, such as inflation, have had the opposite effect. Yet the positive factors are reflected in the poverty data compiled using the Eurostat methodology.

In any case, it is this entirely Italian indicator – which shows rising poverty over the last decade – that is dominating public and political debate in Italy. The other indicator, based on the EU-SILC survey also carried out by Istat, which instead shows a decline in poverty, is not taken into account. We are unable to say which of the two indicators is more valid, if indeed such a judgement can be made at all. Nor can we say whether the two indicators might be pieces describing different parts of the same mosaic. But perhaps the problem—already raised in the past by Massimo Baldini, an economist at the University of Modena-Reggio Emilia, in the pages of Il Foglio—is precisely this: by giving excessive political and media prominence to just one of the two indicators—the one showing poverty to be inexorably rising or, at best, static—are we not in danger of missing a piece of reality? And does this visual distortion not also risk leading to distorted policy choices when tackling the problem?