Features of personal income inequality before and during the crisis: an analysis of Italian regions

ABSTRACT

This paper gives extensive evidence about disposable income inequality inside the regions of Italy and its associated population features. It explores whether the Great Recession changed income inequality within or between regions. Inequality appears largely to be a within-region problem, particularly in the South, and the crisis exacerbated this phenomenon. Middle-class women, migrants and large households in the middle/bottom classes, and bottom-class mothers worsened their income status with the crisis. Education was an important absorber for middle-class individuals, while married status and employment protected bottom-class individuals. Yet, large heterogeneity exists across regions.

KEYWORDS:

• income inequality
• regions
• economic crisis
• quantile regression analysis

JEL:

• D31
• F22
• O15
• R23

ACKNOWLEDGEMENTS

The authors thank Inmaculada Mohino, José Marìa Ureῆa and the participants at the NECTAR Cluster 4 Meeting ‘Travel, Migration, Housing and Labour Market in a Context of Crisis. Lessons for the Future’, Toledo, Spain, October 2016.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

ORCID

Chiara Mussida https://orcid.org/0000-0002-9338-9005

Maria Laura Parisi http://orcid.org/0000-0002-7072-3664

Notes

1. Italy includes 20 administrative regions: Piedmont, Valle d’Aosta, Lombardy, Liguria (North-West), Trentino-Alto Adige, Veneto, Friuli-Venezia Giulia, Emilia-Romagna (North-East), Tuscany, Marche, Umbria, Lazio (Centre), Abruzzo, Molise, Puglia, Campania, Basilicata, Calabria, Sicily and Sardinia (South).

2. Cassa integrazione guadagni ordinaria (CIG), straordinaria (CIGs) and in deroga (CIGsder) are integration measures to help workers who temporarily lose their job. These and other passive measures are national instruments, differing in their sector of activity, firm size, seniority and pay level, type of occupation, whether temporary or permanent, part time or full time, household composition, and duration of the support.

3. In the same four years, resources amounted to €2526 million to Southern regions, €1174 million to central regions, €2581 million to Northern regions and 34.2% financed through the Regional Operative Program to support passive measures of income support. More than 800,000 workers were eligible and received a ‘treatment’; 60% of them were men, mostly from micro and small companies with a permanent contract. Unemployed workers received a ‘participation reimbursement’ only if they were available to participate in new active labour programmes. In the period 2009–12, only Lombardy, Veneto, Emilia-Romagna and Piemonte delivered 50% of total treatments (ISFOL, 2014).

4. See http://www.oecd-ilibrary.org/economics/data/oecd-national-accounts-statistics_na-data-en/.

5. Italy experienced 12 quarters of negative GDP growth starting from IV2011 and ending in III2014, with regional heterogeneity (ISTAT, 2016).

6. Technically, a simultaneous quantile regression with bootstrapped standard errors with ‘between-quantile’ blocks variance/covariance matrix of the estimator (Gould, 1998).

7. See https://www.istat.it/it/archivio/16777/.

8. See note 2.