Italy

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Overview of Trends of Economic Inequality in Italy

 

Has the dispersion of earnings been increasing in recent decades?Yes, the top decile is now around 155 per cent of the median (it rose to 167 before the onset of the 2007 Great Recession), compared with 145 per cent at the start of the 1980s.
Has overall inequality increased in recent years?The evidence is not clear. The Gini coefficient increased by approximately 4 percentage points from early 1980s to 2010. However, overall inequality was generally stable since early 1990s. There was a step up in the Gini coefficient around 1993 but this may in part reflect changes in the underlying survey.
Have there been periods when overall inequality fell for a sustained period?Yes, Gini coefficient fell by some 10 percentage points in the 1970s.
Has poverty been falling or rising in recent decades?Rising. The percentage of individuals living in households with (equivalised) disposable income below 60 per cent of the median went from around 15% in early 80s to around 23% in 2012.
Has there been a U-pattern for top income shares over time?Yes, but the evidence is incomplete. The top gross income shares have fallen in the 1970s and risen since the early 1980s.
Has the distribution of wealth followed the same pattern as income?Yes, to some extent. Top 1% wealth share rose in 1990s.
Additional noteworthy featuresSome evidence of U-shaped pattern in post-war period. Steep rise in top wealth share from 1989 to 2000. Gini coefficient on household income relatively volatile over time.

Sources and References

Sources for the historical data series:

Overall inequality: Gini coefficient of per-capita income among individuals computed by N. Amendola, A. Brandolini and G. Vecchi and taken from Vecchi (forthcoming) based on work from Brandolini (1999) and Brandolini and Vecchi (2011) and Vecchi (2011); income is deflated using a spacial index of the cost of living at the regional level based on the work of Amendola, Kiswani and Vecchi (2009).

Top income shares: Shares of top 1 and 0.1 per cent in total gross income from WTID, based on work of Alvaredo and Pisano (2010).

Poverty: Percentage of individuals in households with equivalised (modified OECD scale) disposable income below 60 per cent of the median from Bank of Italy, data supplied by A Brandolini.

Individual earnings: From Atkinson (2008, Appendix K, Table K.4). Later figures provided by Andrea Brandolini.

Wealth: Share of top 1 per cent in wealth from Brandolini et al (2004, Table 6, adjusted figures) and Brandolini (forthcoming).

References:

  • Alvaredo, F and Pisano, E, 2010, “Top incomes in Italy 1974-2004” in A B Atkinson and T Piketty, editors, Top incomes: A global perspective, Oxford University Press, Oxford.
  • Amendola, N., Al Kiswani, B and Vecchi, G., (2009) “Il costo della vita al Nord e al Sud d’Italia, dal dopoguerra a oggi. Stime di prima generazione”, Rivista di Politica Economica, (2009), IV-VI, 3-34.
  • Atkinson, A B, 2008, The changing distribution of earnings in OECD countries, Oxford University Press, Oxford.
  • Brandolini, A. (1999), “The Distribution of Personal Income in Post-War Italy: Source Description, Data Quality, and the Time Pattern of Income Inequality”, Giornale degli Economisti e Annali di Economia, vol. 58, pp. 183-239.
  • Brandolini, forthcoming, “The Big Chill. Italian Family Budgets after the Great Recession”. In C. Fusaro and A. Kreppel (eds.), Italian Politics 2013. New York: Berghahn, forthcoming.
  • Brandolini, A. and and G. Vecchi (2011), “The Well-Being of Italians: A Comparative Historical Approach”, Bank of Italy, Economic History Working Papers n. 19.
  • Brandolini, A, Cannari, L, D’Alessio, G, and Faiella, I, 2004, “Household wealth distribution in Italy in the 1990s”, Bank of Italy, Economic Research Department.
  • Vecchi, G. (2011) “In ricchezza e in povertà. Il benessere degli italiani dall’Unità a oggi”, Bologna: Il Mulino.
  • Vecchi, G. (forthcoming) “A History of Living Standards in Italy, 1861-2011” Monograph for Oxford University Press. In preparation.