Distribution of income in Italy
The income distribution in Italy considered the personal income distribution of the population living in Italy. Personal income distribution describes how the income of an economy is distributed among individuals or groups (e.g. private households ). When interpreting statistical data, the different uses of the term income must be taken into account, because a distinction must be made between gross income , income, taxable income and net income or disposable income .
For Italy , the Gini index was 32.7 points in 2017, and the median disposable income was EUR 16,542. Compared to other countries in the European Union , the country is in the upper midfield. This means that income in Italy is relatively unevenly distributed compared to other European countries. The 80/20 ratio was 5.9 in 2017, so the top 20% in the income distribution held roughly 6 times the disposable income compared to the bottom 20%. This value differs only marginally for men and women in Italy. In the EU-28 average, the 80/20 ratio was just below that with a value of 5.1. In 2017, 20.3% of the Italian population were at risk of poverty , compared to 16.9% on average for the EU-27.
Income inequality in Italy has a strong spatial dimension. In general, it can be observed that the further south the region in Italy is, the lower the incomes and the higher the proportion of the population at risk of poverty and social exclusion. For the population living in the big cities of Italy, one finds a similar north-south divide based on income. In contrast, the risk of poverty in all large cities was only 10% in 2017.
Methods for displaying and calculating the distribution of income
Differentiation between market income, secondary income, disposable income and equivalised income
The type and aggregation of income play a decisive role in the interpretation and comparability of the indicators. There are basically two types of income. On the one hand, the income that comes about through dependent and self-employed work, which is referred to as market income or primary income . On the other hand, the income after taxes and government transfers characterizes the so-called secondary income. Market income is made up of income from employment, business activity, rental, capital before taxes and duties. Secondary income takes into account social security contributions, direct taxes, and public (e.g. social assistance, unemployment benefits) and private (e.g. maintenance) transfers. Secondary income is thus the disposable income of private households which is available for private consumption and private saving. The comparison between market income and secondary income provides information about the extent of the distributional policy measures in the country.
The equivalent income is that income that each member of a household if it had grown and would live alone, the same (equivalent) standard of living would allow that it has within the household community. To do this, the income of the entire household is added up and then weighted using an equivalence scale. The weighting depends on the number and age of the people in the household.
Overview of income indicators
Mean and median
The mean here describes the average income. If one arranges the income according to its level, the income which is in the middle of this distribution corresponds exactly to the mean income ( median ). In principle, the median is more suitable than the mean for analyzing income levels, as the former is more robust against outliers. These outliers are high incomes at the higher end of the income distribution.
The median equivalised disposable income was EUR 15,640 in 2008 and rose to EUR 15,846 by 2015. Thereafter, a stronger increase is recorded. In 2017 it was EUR 16,542. The mean value of the equivalised disposable income also shows a similar trend, with only a slight increase in the period from 2008 to 2015 (from EUR 17,711 to 17,890) and a more pronounced increase to EUR 18,714 by 2017. If you compare the mean and median of the equivalised income, a clearly higher value for the mean becomes apparent. The higher level of the mean is due to the skewness of the distribution typical of income data .
From 1996 to 2012 (with the exception of 2001–2003 due to a data gap), real equivalised income (mean and median adjusted for inflation using the HICP ) were significantly higher than nominal equivalised income . In the years 2004–2010, clear fluctuations can be seen in real equivalised income. From 2010 to 2012 the real equivalised income will decrease.
Income deciles
If you sort people in ascending order according to income and divide them into 10 groups of equal size, each into 10% of the total population, you get the income decile of an economy . This shows what proportion a decile (e.g. the tenth decile) has in total income. The equivalised disposable income is used as income for the calculation . In 2008, the tenth income decile in Italy earned 23.8% of total equivalised disposable income. This value rose to 24.9% by 2013, but fell again to 24.4% by 2017. In 2005, the top ten percent of the income distribution held the highest share of disposable income, 25.2%. The share of the top ten percent of the income distribution in Italy from 2007 to 2017 was higher than that of the EU-27, with the exception of 2008/09 .
S80 / S20 income quintile ratio
Another indicator of income distribution is the S80 / S20 income quintile ratio. This indicates the ratio of the income of the top quintile , i.e. the top 20% of the income distribution, to the income of the bottom quintile. The factor in Italy was 5.4 in 2007 and increased to 5.9 by 2017. The top 20% had around 6 times the disposable income in 2017 compared to the bottom 20%. In 2017, the EU-27 average was 5.1. In Italy, the top quintile therefore has a higher share of disposable income than the EU-27 average.
| S80 / S20 income quintile ratio in Italy and EU-27 | |||||||||||
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EU-27 | 5.0 | 5.0 | 4.9 | 4.9 | 5.0 | 5.0 | 5.0 | 5.2 | 5.2 | 5.2 | 5.1 |
| Italy | 5.4 | 5.2 | 5.3 | 5.4 | 5.7 | 5.6 | 5.8 | 5.8 | 5.8 | 6.3 | 5.9 |
Gini coefficient
The Gini coefficient lies between 0 and 1 and is a measure of the distribution of income. A Gini coefficient of 0 means that all individuals in an economy have exactly the same income. On the other hand, a Gini coefficient of 1 represents the greatest inequality - one person holds all income. The Gini coefficient can also be mapped on the basis of an index scale, the Gini index , which is between 0 and 100. Where the interpretation is the same as the Gini coefficient. A value of 0 means perfect equality and a value of 100, perfect inequality of income.
When considering the Gini coefficient, it should be noted that the data on which the calculation is based does not include the population as a whole. Individuals who work in the informal sector and the homeless are excluded from the survey. Furthermore, the Gini coefficient does not provide any information about the absolute income level of the respective population. This means that a country with very low incomes, while having a relatively equal distribution of income (low Gini), can still have a poor population. In this case, all people in this country are relatively equally poor.
When dealing with the Gini coefficient, it is also important to note which income category is used as the basis for calculation. A distinction must be made between market income, secondary income and disposable income. The comparison between the Gini coefficient of market income (before taxes and transfers) and disposable income (after taxes and transfers) provides information about the distribution measures of a state. A comparison of these two Gini coefficients reveals a higher Gini before taxes and transfers in Italy for the entire time series from 2004–2016. The Gini coefficient of market income in Italy was between 0.49 and 0.52 in 2004-2016. In contrast, the Gini coefficient of disposable income was consistently between 0.32 and 0.33 over the same period. A significantly lower Gini coefficient can be determined here after government redistribution measures. That is, state redistribution creates a significant reduction in inequality in Italy.
If you compare Italy's Eurostat Gini index (based on disposable income) with that of its neighboring countries, Italy's Gini index is always higher in a national comparison of its neighboring countries. In addition, the Gini index of the EU-27 countries was continuously below that of Italy in the period from 2004 to 2017. Income inequality in the EU was on average lower than that in Italy.
Gender income inequality
S80 / S20 income quintile ratio
When looking at the 80/20 income quintile ratio (again based on the equivalised disposable income ) between the sexes in the years 1995–2017, it can be seen that this ratio is at a similar level for men and women and that the gender differences are only over time move slightly. Over this period, the 80/20 income quintile ratio for both sexes is between 5 and 6.3. For example, a ratio of 5 means that the top 20% of the population in the income distribution have around 5 times as much income as the part of the population with the lowest 20% of incomes. Over the course of time, the 80/20 income quintile ratio decreased continuously from the beginning in 1996 to 2000 until in 2000 it was the smallest difference between the top 20% and the top 20% for both women and men with a ratio of 4.8 reaches the lowest 20% of income. After 2004, the 80/20 income quintile ratio is at a significantly higher level, but then falls again until around 2010. From 2010, a positive trend can finally be seen in the development of the 80/20 income quintile ratio, which in 2016 had values above 6 for both Sexes peaked.
Gender pay gap
The graph on the gender pay gap shows the development of the unadjusted gender wage gap in the NACE2 activity industry, construction and services (excluding public administration, defense and social insurance) in Italy compared to the EU27 member countries. The unadjusted gender wage gap represents the difference between the average gross wage of men and women as a proportion of the average gross wage of men. In the gender pay gap, a clear difference can be seen between the average value for the EU27 member states and Italy over the entire period from 2007–2017 . While women in the industry, construction and services sector in Italy earn between 5% and 7% less than men, this figure is significantly higher in the EU-27 average over the entire observation period at around 17%. A slight expansion of the unadjusted gender wage gap in this sector only occurred between 2011 and 2015 , both in the EU-27 average and in Italy. In Italy, the gap increases from around 6% in 2011 to 7% in 2007, until the 2015 value again assumes the initial value of 2011. By 2017, the gender pay gap in industry, construction and services in Italy will stabilize at around 5%. On average, the value for all EU-27 countries also rose by around one percentage point in 2011, but stabilized again in the following year and decreased steadily until 2017. In 2017, the gender pay gap in industry, construction and services in the EU27 average reached the lowest value of 16%, 9 percentage points above the value in Italy. Compared to the EU-27 average, women in Italy earn more relative to men.
Regional income inequality
Inequality in Italy has a significant spatial component. The industrial north is opposed to the underdeveloped south , the Mezzogiorno. Central Italy, often managed as a separate region (not to be confused with the regions in the sense of the regional authorities ), is often assigned to the Italian north, its structure and its data are more similar to the north than the south. This inequality between the regions can be seen in Italy in terms of culture and society, but also in relation to economic aspects.
Disposable household income
When looking at the regional disposable income of private households in Italy in 2017, this three-way economic division is clearly visible. In the southern regions of Italy, the disposable income per inhabitant in 2017 was between 12,100 ( Calabria ) and 13,700 ( Molise ) euros. The lowest incomes are in Calabria and Campania with 12,100 and 12,300 euros respectively. The inhabitants of the central Italian regions have a little more income at their disposal , namely between 14,300 ( Sardinia ) and 17,800 ( Lazio ) euros. With an average of 17,500 euros, the regions Umbria , Marche and Lazio are at the upper end of the distribution in central Italy. There is not much difference in income within the northern Italian regions. The available household income here is around 19,000 euros. Only the autonomous province of Bolzano - South Tyrol , the northernmost Italian province, falls into an even higher income category with an available income of 23,000 euros.
Italy has a progressive tax system . Since the income concept of disposable income used in the data already includes available net income data, all redistributive effects of a progressive income tax and a social transfer system were already applied in the present regional income distribution from 2017 . A look at the development over time also shows that the difference between the incomes of the southern provinces such as Calabria and northern regions such as Lombardy is not about to shrink. The north is economically ahead of the Mezzogiorno, and at least the trend is not falling. However, no information can be derived from this about the income distribution within the individual regions, as the microdata necessary to calculate distribution key figures within the regions are not published and no Gini coefficients are available for the individual regions.
Poverty and social exclusion
Based on the Eurostat definition, a person is considered to be at risk of poverty and social exclusion if they are at risk of poverty or material deprivation or if they live in households with very low employment . A person with an equivalised income below 60% of the national median equivalised income is considered to be at risk of poverty . Material deprivation includes on the one hand the economic burden and on the other hand the lack of durable consumer goods and is defined as the involuntary inability to be able to afford certain goods of daily life. In general, the proportion of the population at risk of poverty in Italy in 2017 was between 8.5% (autonomous province of Bolzano) and 52% ( Sicily ). In other words, while in 2017 not even one in ten people was affected by poverty and social exclusion in the province of Bolzano, it was one in two in Sicily. This distribution already indicates that geographical location also plays an important role in poverty. A pattern similar to that of disposable household income can be seen. In 2017, people are increasingly exposed to poverty and social exclusion in the southern regions, especially in the western parts of the south of Calabria , Sicily and Campania . The further north the region is in Italy, the less likely it is for its population to be affected by poverty and social exclusion. As a small difference to the spatial distribution of income, it can be seen in the proportion of poverty that the north-eastern regions of Italy also stand out from the north-western regions and in the north-east the proportion of people at risk of poverty and social exclusion is a further 10 percentage points lower, than in northwest Italy. There are hardly any differences between central Italy and the north-western regions of Italy in terms of the likelihood of being affected by poverty.
| At-risk-of-poverty rate by region in% | |||||
| north | south | ||||
| year | Northwest | Northeast | center | south | Islands |
| 2007 | 11.6 | 9.6 | 13.2 | 32.9 | 36.9 |
| 2008 | 11.2 | 9.6 | 12.7 | 32.7 | 34.6 |
| 2009 | 10.4 | 9.7 | 12.9 | 31.5 | 34.3 |
| 2010 | 11.4 | 9.7 | 13.8 | 31 | 33.6 |
| 2011 | 10.8 | 9.9 | 14.8 | 32.9 | 39.3 |
| 2012 | 10.7 | 10.6 | 15.5 | 32 | 36.4 |
| 2013 | 9.9 | 10.4 | 15.2 | 32.6 | 36.1 |
| 2014 | 11.1 | 10.4 | 15.4 | 31.6 | 36.6 |
| 2015 | 11.8 | 9.9 | 16.1 | 32 | 38.2 |
| 2016 | 13.7 | 10.5 | 16.8 | 31.8 | 38 |
| 2017 | 13.7 | 10.2 | 16.6 | 30.6 | 38.4 |
A look at the poverty rate in the years before 2017 from 2007 onwards also shows that the poverty rate has remained more or less constant over the last decade, but recorded a slight increase between 2007 and 2017 and spatial inequality even increased somewhat. These figures also show no trend towards a better economic situation in the country or towards convergence between the two large regions.
In summary, about the regional income distribution in Italy, the more southern the region, the lower the income and the higher the proportion of people at risk of poverty and social exclusion.
Inequality in metropolitan areas
| Inequality in metropolitan areas in 2016 | |||||
| city | Population share | income | Gini | At risk of poverty rate | |
| Florence | 1.3% | $ 30,553 | 0.3 | 10% | |
| Palermo | 1.7% | $ 16,870 | 0.3 | 10% | |
| Padua | 0.9% | $ 29,795 | 0.3 | 10% | |
| Turin | 2.9% | $ 29,477 | 0.3 | 10% | |
| Milan | 8.4% | $ 32,218 | 0.3 | 10% | |
| Bologna | 1.2% | $ 35,186 | 0.3 | 10% | |
| Genoa | 1.2% | $ 29,132 | 0.3 | 10% | |
| Naples | 5.6% | $ 17,847 | 0.3 | 10% | |
| Rome | 7.3% | $ 27,126 | 0.3 | 10% | |
| Catania | 1.1% | $ 17,410 | 0.3 | 10% | |
| Bari | 1.2% | $ 23,165 | 0.3 | 10% | |
| Venice | 0.9% | $ 28,133 | 0.3 | 10% | |
| Verona | 0.9% | $ 29,055 | 0.3 | 10% | |
In addition to considering income inequality on a general regional level, there is also the opportunity in this context to compare the large cities and metropolitan regions in Italy. The table Inequality in Metropolitan Regions shows the inequality between and within the large Italian cities using different key figures based on OECD data. Income is represented as household disposable income per capita in USD at constant prices and the Gini coefficient and at- risk-of-poverty rate are calculated based on disposable income after taxes and transfers. Due to data gaps, these key figures could not be given for all large cities in Italy.
In the metropolises of Italy, the disposable household income ranges from USD 16,900 in Palermo in the Sicily region to USD 35,100 in Bologna in the Emilia-Romagna region . It is noticeable that the second Sicilian metropolis Catania with 17,400 USD and Naples with 17,800 USD in Campania, ahead of Palermo, are also at the bottom of the income distribution . These three cities in the southern regions of Italy are far behind in terms of income distribution after all other metropolises, which with the exception of Bari ( Apulia region ) all have a per capita income of at least USD 27,100. At least between the south and the rest of Italy's regions, a clear income gap can thus also be demonstrated on the basis of the metropolitan regions .
Although the cities in southern Italy have a clear disadvantage in terms of income compared to the cities in the other regions, their income level is well above the average values of the southern Italian regions. Although the income values listed cannot be compared one-to-one with the disposable household income according to NUTS 2 regions due to different currencies, differences of several thousand euros can still be seen after converting USD into euros. There is also a clear urban-rural gap in the northern cities, because the income level in the large cities is also above the average for the regions.
The Gini coefficient shown in the table reflects that income is not evenly distributed within the cities . The constant Gini coefficient of 0.3 and the constant at- risk- of- poverty rate of 10% between the metropolises are striking . These values mean that in all the cities listed, income inequality is the same and an equal proportion of the population is at risk of poverty. In order to be able to make a more precise statement in this regard, the availability of a more detailed scale for the Gini coefficient and the at-risk-of-poverty rate would be necessary. If one compares the at-risk-of-poverty rate for metropolises with the same key figure based on the regions, a significantly lower at-risk-of-poverty rate can be observed in the cities than in the regions in general. This means that cities can not only generate more income per capita on average, they are also less likely to be at risk of poverty.
Causes and Background
“La Questione Meridionale” , the question of how to deal with the difficult situation in the south, arose as early as the late 19th century. It relates to economic, social and cultural aspects. The Mezzogiorno , i.e. the south, could not catch up economically with the Italian north. The reasons for this are of economic, cultural and social origin. In the 19th century, the Italian leadership showed little interest in dealing with the south. If, according to the Marshall Plan, a solution to the Questione Meridionale was within reach, the rise of the Mafia and radical debt reduction policies hit the Mezzogiorno hard. The peripheral geographical location also poses a certain challenge for a functioning industry in southern Italy, and even exports within the EU require significantly longer transport routes. Accordingly, the degree of industrialization in northern Italy is much higher than in the Mezzogiorno. In the northern Italian province of Emilia-Romagna , around 14% of employees work in the manufacturing sector, whereas this figure is only around 3% in Sicily and Calabria . The export volume of the Mezzogiorno is only 40% of the export volume of the Piedmont region . Corporate spending on research and innovation is around 0.8% in northern Italy, compared to only 0.3% in southern Italy. The problem of organized crime , which is very specific to southern Italy , must not be ignored . Using mafia-like structures, regional monopolies are created to prevent competitors in "their" market.
bibliography
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Web links
- ISTAT - Homogeneity of regional income: Net family income distribution indicators - Gini's Index (English)
Individual evidence
- ↑ EUROSTAT. Retrieved January 18, 2019 .
- ↑ OECD. Retrieved January 18, 2019 .
- ↑ Rate of people at risk of poverty by at-risk-of-poverty line. Eurostat, 7 May 2019, accessed 15 May 2019 .
- ↑ United Nations Economic Commission for Europe: Handbook on Houshold Income Statistics. (PDF) Retrieved May 8, 2019 .
- ↑ Average and median income - EU-SILC survey. Retrieved May 7, 2019 .
- ↑ HICP (2015 = 100) - Annual data (average index and rate of change). Retrieved May 7, 2019 .
- ↑ Distribution of income by quantile - EU-SILC survey. Retrieved May 7, 2019 .
- ↑ Glossary: Income quintile share ratio - Statistics Explained. Retrieved May 2, 2019 .
- ↑ Eurostat: S80 / S20 ratio: comparison Italy vs EU28. Retrieved January 19, 2019 .
- ↑ Distribution of income by quantile - EU-SILC survey. Retrieved May 9, 2019 .
- ↑ S80 / S20 income quintile ratio - EU-SILC survey. Retrieved May 10, 2019 .
- ^ Gini coefficient. Retrieved May 15, 2019 .
- ^ Income Distribution and Poverty. Retrieved May 15, 2019 .
- ↑ Italy Individual - Taxes on personal income. In: PVC. Retrieved January 19, 2019 .
- ↑ Eurostat: Disposable Household Income by NUTS 2 Regions. In: EUROSTAT. April 12, 2019, accessed May 3, 2019 .
- ↑ Glossary: Rate of people at risk of poverty or social exclusion (AROPE) - Statistics Explained. Retrieved May 2, 2019 .
- ↑ Glossary: At-risk-of-poverty rate - Statistics Explained. Retrieved May 2, 2019 .
- ↑ Glossary: Material Deprivation - Statistics Explained. Retrieved May 2, 2019 .
- ↑ Eurostat: Eurostat Database. Accessed January 2019 .
- ↑ Metropolitan areas. Retrieved May 3, 2019 .
- ^ Dario Musolino: North-South divide in Italy: reality or perception? In: European Spatial Research and Policy . tape 25 , 2018, p. 29-53 , doi : 10.18778 / 1231-1952.25.1.03 .