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The Geography of Italian Income Inequality: Recent Trends and the Role of Employment

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  • Emanuele Ciani
  • Roberto Torrini

Abstract

We study the role of regional imbalances in explaining the high household income inequality in Italy. In the first part of the work we use the Survey of Household Income and Wealth (SHIW) to describe the trends in income inequality between and within areas since the early 2000s. We illustrate that the between-area inequality has been relatively stable, while the within-area component increased significantly after the recession and during the recovery. In 2016, the large geographical divide and the higher inequality within the South contributed to almost one fifth of national inequality. In the second part we show that the distribution of employment is key in explaining the regional differences in both average income and its dispersion. By means of simulations based on matching and reweighting, we estimate that national inequality would be reduced by 15% if the distribution of work hours across Southern households were similar to the one in the more developed Centre-North. Regional employment differentials are so important in determining overall inequality that income dispersion would decline substantially even if this increase in employment were associated with a drop in Southern regions' average labour income.

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  • Emanuele Ciani & Roberto Torrini, 2019. "The Geography of Italian Income Inequality: Recent Trends and the Role of Employment," Politica economica, Società editrice il Mulino, issue 2, pages 173-208.
    • Handle: RePEc:mul:je8794:doi:10.1429/94536:y:2019:i:2:p:173-208
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    1. Giulia Bovini & Emanuele Ciani & Marta De Philippis & Stefania Romano, 2023. "Labour income inequality and in-work poverty: a comparison between euro area countries," Questioni di Economia e Finanza (Occasional Papers) 806, Bank of Italy, Economic Research and International Relations Area.
    2. Gabriele Ruiu, 2023. "Exploring polarisation in economic hardship among Italian macro-regions," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(1), pages 787-817, February.
    3. Guzzardi, Demetrio & Morelli, Salvatore, 2024. "A New Geography of Inequality: Top Incomes in Italian Regions and Inner Areas," SocArXiv b2yue, Center for Open Science.
    4. Albanese, Andrea & Gallo, Giovanni, 2020. "Buy flexible, pay more: The role of temporary contracts on wage inequality," Labour Economics, Elsevier, vol. 64(C).
    5. d'Agostino, Giorgio & Patriarca, Fabrizio & Pieroni, Luca & Scarlato, Margherita, 2020. "The perverse effects of hiring credits as a place-based policy: Evidence from Southern Italy," MPRA Paper 102240, University Library of Munich, Germany.
    6. Cristian Barra & Anna Papaccio & Nazzareno Ruggiero, 2023. "Government effectiveness and inequality in Italian regions," Economic Change and Restructuring, Springer, vol. 56(2), pages 781-801, April.
    7. Bartak, Jakub & Jabłoński, Łukasz & Tomkiewicz, Jacek, 2022. "Does income inequality explain public debt change in OECD countries?," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 211-224.
    8. Surico, Paolo & Andreolli, Michele, 2021. "Less is More: Consumer Spending and the Size of Economic Stimulus Payments," CEPR Discussion Papers 15918, C.E.P.R. Discussion Papers.
    9. Franecsca Carta, 2019. "Timely indicators for labour income inequality," Questioni di Economia e Finanza (Occasional Papers) 503, Bank of Italy, Economic Research and International Relations Area.
    10. Michele Costa & Flavio Delbono & Francesco Linguiti, 2021. "Cooperative Movement and Prosperity across Italian Regions," Working Papers wp1161, Dipartimento Scienze Economiche, Universita' di Bologna.
    11. Ferri, Giovanni & Lagravinese, Raffaele & Resce, Giuliano, 2024. "Inequality and Gambling," Economics & Statistics Discussion Papers esdp24095, University of Molise, Department of Economics.
    12. Niccolò Comerio & Fausto Pacicco, 2024. "The role of tourism in reducing economic inequalities: the case of Italy," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 41(3), pages 839-880, October.
    13. Bloise, Francesco & Chironi, Daniela & Pianta, Mario, 2019. "Inequality and elections in Italian regions," MPRA Paper 96416, University Library of Munich, Germany.
    14. Marco Baudino, 2020. "Environmental Engel curves in Italy: A spatial econometric investigation," Papers in Regional Science, Wiley Blackwell, vol. 99(4), pages 999-1018, August.
    15. Jasmine Mondolo, 2022. "Product and labour market imperfections in the Italian manufacturing sector: a firm-level analysis," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(3), pages 813-838, October.
    16. Francesca Carta, 2020. "Timely Indicators for Inequality and Poverty Using the Italian Labour Force Survey," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(1), pages 41-65, May.
    17. Michele Costa & Flavio Delbono & Francesco Linguiti, 2023. "Cooperative movement and widespread prosperity across Italian regions," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(2), pages 475-494, June.

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    More about this item

    Keywords

    Inequality; North-South Divide; Work Intensity.;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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