Working Papers

V. Meliciani, G. Terzo – Public welfare spending and regional well-being: an empirical analysis of Italy

In this paper, we investigate the relationship between public welfare spending and well-being, focusing on Italian NUTS-2 regions. In line with a broad strand of literature, we argue that public investment in health, social protection, and education is a lever to protect citizens from increasing social risks and to improve educational attainment and health, with consequent benefits for their quality of life and individual productivity. In order to analyse the level of well-being of the regions, we constructed a composite index which, following the conceptual framework of the Human Development Index, covers three dimensions: material living conditions, health, and education. We also developed a measure to assess the level of public investment in human development, including public spending on health, education, and social protection. Econometric analysis on a panel of 21 NUTS-2 regions confirms the hypothesis that public welfare spending can affect regional well-being by promoting human development.

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