Inequality Amid Income Stagnation: Italy Over the Last Quarter of a Century

38 Pages Posted: 15 Jul 2018

Date Written: June 15, 2018

Abstract

The paper analyses the evolution of inequality in Italy from 1989 to 2014, focusing on three business-cycle phases: the 1992 currency crisis, the moderate growth from 1993 to 2007, and the double-dip recession from 2008 to 2013. Data from the national accounts and the Bank of Italy’s Survey on Household Income and Wealth are used. Results show that income inequality, as measured by the Gini coefficient, rose sharply during the recession of the early 1990s but much less during the recent double-dip recession, though the share of people at risk of poverty rose similarly during the two crises. The stability of (synthetic) distributive inequality measures is explained by the fact that the reduction in income during the double-dip recession hit the whole population. Despite this apparent stability, two changes stand out: the widening gap between the young and the elderly and the fact that the deterioration in living conditions was borne wholly by households whose primary earner was foreign born.

Keywords: inequality, household income distribution

JEL Classification: D31, E24

Suggested Citation

Brandolini, Andrea and Gambacorta, Romina and Rosolia, Alfonso, Inequality Amid Income Stagnation: Italy Over the Last Quarter of a Century (June 15, 2018). Bank of Italy Occasional Paper No. 442. Available at SSRN: https://ssrn.com/abstract=3212653 or http://dx.doi.org/10.2139/ssrn.3212653

Andrea Brandolini (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Roma, Rome 00184
Italy
+390647923568 (Phone)
+390647923720 (Fax)

Romina Gambacorta

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

Alfonso Rosolia

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy
0039 06 4792 3077 (Phone)

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