Early Retirement in the Italian Social Security System: Some Critical Insights

Abstract

This paper examines the age and contributory requirements needed to take retirement in Italy. The focus is on one of the novelties introduced by Decree Law No. 4/2019, namely the possibility to access early retirement through the temporary Quota 100 scheme. This can be done provided that the worker has paid 38 years of contributions and is at least 62 years old by the end of 2021. This exception allows retirement up to 5 years before fulfilling the requirements established under current legislation. Moreover, according to Decree Law No. 4/2019, until 2026 life expectancy growth will not be considered for the purposes of automatic upwards adjustments in pension eligibility requirements. The paper argues that the new measures privilege a specific cohort of people, frustrating the improvements of the Italian pension system over the last three decades. This view is supported by the fact that this temporary relaxation of retirement criteria is not in line with the needs of the Country which emerge through social research and statistical data. Based on demographic and economic analysis, this paper argues that some imbalances question the long-term economic and social sustainability of national social security. The most serious imbalance concerns the disparity between young and older citizens, as the current apparatus favours people who have already reached – or are about to reach – retirement, disadvantaging the following generations.