Abstract

As a consequence of the pandemic the linkage between in-work benefits (IWBs) and minimum income schemes (MIS) is likely to gain prominence, due to the potential impact of asymmetric employment shocks on low-income workers. Framing the characteristics of IWBs in the institutional setting and the functioning of the welfare state in a selected number of European countries, this article draws lessons for the Italian case on the role of these kinds of measures in avoiding poverty traps. Using EU-LFS data and INAPP Plus data, the article analyses, in the Italian case, the variation before and after the pandemic outbreak in the profiles of MIS beneficiaries close to the labour market and of those workers who have become unemployed. Evidence indicates that the variations in the profiles of MIS beneficiaries and those transitioning into unemployment after the pandemic outburst call for the introduction of a fully-fledged IWB. This should be properly linked with MIS to minimize the risks of a poverty trap, and encourage the take-up of regular employment. Rather than dismantling MIS support for the «employable» recipients, evidence suggests that reform should focus on making MIS compatible with work through the IWB scheme