Professor Alessia Russo, winner of the ERC Consolidator Grant.
The Department of Economics and Management "Marco Fanno" is pleased to announce a significant achievement by Alessia Russo, Full Professor of Economics at the department.
Professor Russo has been selected as a winner of a prestigious ERC Consolidator Grant 2025, securing funding of nearly 1,300,000 euros for her innovative research project.
The winning project, titled "RESTATE: Rethinking the Welfare State under Political Constraints in a Changing World", aims to reconsider the concept of the welfare state in the context of contemporary global challenges and existing political constraints. This cutting-edge research seeks to analyze the pressures on the welfare state arising from global changes, examine the political frictions that hinder welfare reforms, and propose new models suited to the challenges of the 21st century.
Professor Russo's success is not an isolated case but is part of an already established path of excellence. In 2021, she was awarded a STARS@UNIPD grant, an internal program of the University of Padua aimed at promoting high-level scientific activities and preparing researchers for competitive international calls. This previous recognition evidently laid the foundation for her current success at the European level.
The ERC Consolidator Grant will allow Professor Russo to consolidate her research group and carry out a highly innovative and visionary project, significantly contributing to the international debate on the future of the welfare state. This important result not only rewards Professor Russo's individual excellence but also highlights the innovative strength and vitality of the University of Padua as a whole.
The Rector of the University of Padua, Daniela Mapelli, expressed great satisfaction for this result, which joins the similar success of Piero Poli, Associate Professor at the Department of Geosciences, winner of the ERC Consolidator Grant 2025, stating: "The success of Alessia Russo and Piero Poli, to whom my congratulations and those of the entire academic community go, represents a result of great value, which rewards the solidity of their scientific path and the quality of the ideas they have been able to propose. The ERC Consolidator Grants support projects capable of opening new paths in research, and seeing two of our professors achieve this milestone confirms the vitality and innovative strength of our University. The University of Padua deeply believes in research as an essential lever of progress. Investing in research means investing in people, in the freedom to explore new questions, and in the ability to offer answers that improve society. We are deeply proud of the work of our researchers, who every day contribute to growing a tradition of excellence that looks to tomorrow with courage and responsibility."
The milestone achieved by Professor Alessia Russo represents a source of pride for the entire academic community and further strengthens the position of the University of Padua as a center of excellence in research at European and global levels.
Abstract
Across many countries, demographic changes are reshaping society at a pace that existing welfare states were not built to handle. These systems were designed for younger, higher-fertility societies. Today, rising longevity and declining birth rates mean fewer workers are financing benefits for more retirees, and for much longer periods, placing mounting pressure on public budgets. Without timely reforms, this trajectory is not fiscally sustainable.
Yet even when economically needed, welfare reforms are often difficult to implement. Promised benefits enjoy broad support, and altering them can trigger conflicts between generations that may stall the reform process. Policymakers therefore face a central question: how should the welfare state be designed in a changing world to balance economic sustainability with political viability?
RESTATE addresses this challenge by developing a new theoretical framework that incorporates a key real-world constraint often overlooked in traditional macro publicfinance models: participation in welfare programs cannot always be perfectly enforced. Governments have limited ability to compel individuals to remain in the system or revise long-standing promises. Optimal policy must therefore balance three objectives—improving social welfare, sustaining voluntary participation, and respecting entrenched entitlements.
RESTATE studies this trade-off across three connected fiscal domains, combining theory, quantitative analysis, and empirical evidence, and drawing on tools from demography, macroeconomics, political economy and public finance: Work Package 1 investigates how social security systems can be redesigned to meet the pressure of demographic aging while mitigating political resistance to reform.
Work Package 2 examines the role of public debt as a tool for economic stabilization and insurance when political constraints limit the government’s ability to raise primary surpluses.
Work Package 3 analyzes how productive public investment can support the long-term sustainability of both pensions and public debt. By integrating demographic realities and political constraints within a unified analytical framework, RESTATE offers a new way to think about how welfare states can adapt and remain resilient in the decades ahead.
Bio
Alessia Russo is Full Professor of Political Economy in the Department of Economics and Management at the University of Padua, Research Affiliate of the Centre or Economic Policy Research (CEPR), and a member of the Governing Council of the Galilean School of Higher Education. She holds a B.A. from the University of Florence, an MSc from the Toulouse School of Economics, and a Ph.D. in Economics from the University of Bologna.
After completing her doctorate, she joined the Department of Economics at the University of Oslo as a Postdoctoral Researcher, and later at the Norwegian Business School as Assistant Professor. During her years in Norway, she collaborated with international research teams supported by the European Research Council (ERC). She returned to Italy in 2021 to join the University of Padua as Assistant Professor; she was promoted to Associate Professor in 2023 and to Full Professor in 2025.
Her research sits at the intersection of macroeconomics and political economy, with a particular focus on dynamic public finance and the economic consequences of intergenerational conflict. She also works in environmental economics, especially on the design of optimal international environmental agreements.
Her work has received support from several competitive funding schemes, including the STARS@UNIPD initiative (University of Padua, 2021) and a 2022 PRIN grant from the Italian Ministry of University and Research (MUR).
Her research has been published in leading peer reviewed journals such as The Journal of Political Economy, The Journal of the European Economic Association, The Journal of Environmental Economics and Management, and The American Economic Journal: Economic Policy.
