The geography of Italian income inequality: recent trends and the role of employment

Emanuele Ciani and Roberto Torrini

No 492, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We reassess 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 per cent if the distribution of work hours across southern households was 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 was associated with a drop in southern regions� average wages.

Keywords: inequality; North-South divide; work intensity (search for similar items in EconPapers)
JEL-codes: D63 J21 R10 (search for similar items in EconPapers)
Date: 2019-04
New Economics Papers: this item is included in nep-eur, nep-geo, nep-lma and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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Journal Article: The Geography of Italian Income Inequality: Recent Trends and the Role of Employment (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_492_19

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