Growing Equal? Living Standards, Inequality and Poverty in Italy, Giovanni Vecchi Università di Roma Tor Vergata

Transcription

1 Growing Equal? Living Standards, Inequality and Poverty in Italy, Giovanni Vecchi Università di Roma Tor Vergata Università di Roma La Sapienza Roma October 14, 2014

2 Motivation

3 Three Core Questions 1) How did living standards change during the secular process of Italy s economic development? 2) Who benefited from economic development in Italy, and by how much? 3) How does the evidence affect our appraisal of Italy s secular performance?

4 Answers First try 2011 In ricchezza e in povertà New book Second try 2015 Oxford University Press Work in (slow) progress

5 In ricchezza e in povertà (The Army of) Coauthors Marina Sorrentino (Istat) Brian A Hearn (U. Oxford) Silvia Francisci (National Institute of Health) Vincenzo Atella (U. Rome Tor Vergata ) Gianni Toniolo (LUISS and Duke Univ.) Francesco Cinnirella (Ifo, München) Nicola Rossi (U. Rome Tor Vergata ) Claudio Auria (U. Rome Tor Vergata ) Alessandro Brunetti (Istat) Emanuele Felice (UAB) Nicola Amendola (U. Rome Tor Vergata ) Andrea Brandolini (Bank of Italy) Fernando Salsano (LUISS) Leandro Conte (U. of Siena) Mariacristina Rossi (U. of Torino) Stefano Chianese (U. Orientale Napoli)

6 In ricchezza e in povertà Table of Contents PART I Non-monetary Indicators 1) Undernutrition 2) Heights 3) Health 4) Child Labor 5) Education PART II Monetary Indicators 6) Income 7) Inequality 8) Poverty 9) Vulnerability PART III Tools 10) Household Budgets 11) Spatial Cost-of-Living Indices

7 THE FIRST QUESTION How much has the well-being of the Italians improved over the 150 years since unification?

8 GDP per capita, (Banca d Italia, Istat, Università di Roma Tor Vergata ) EU12 x 11 Germany x 12 France x 13 USA x 13 ITALY x 13 Spain x 15 Sweden x 18 Japan x ANNO

9 Historical time series become rapidly obsolete (Advertisement) Based on the Bank of Italy, Istat, Tor Vergata (BIT) series, new estimates have been produced for GDP between Most changes concentrate in the interwar years Long-run dynamics of GDP/person largely unaffected by this revision

10 Italy (and other countries) versus USA (GDP per person)

11 The great Italian divide, 1871-date (GDP per capita, ) 120 PIL NOMINALE CENTRO NORD PIL REALE CENTRO NORD 100 PIL REALE MEZZOGIORNO 80 PIL NOMINALE MEZZIOGIORNO Anno

12 GDP and Well-Being

13 Selected non-monetary indicators of well-being

14 Brandolini e Vecchi (2011) Worked hours

15 Height at the age of 20 by province, RED = SHORT GREEN = TALL

16 The conquest of longevity FEMMINE : 30 YEARS MASCHI LINEAR PROCESS: 4 EXTRA MONTHS PER YEAR Anno

17 Life expectancy at birth: Italy vs. ROW

18 Life is longer in the Center-North, since Italy was unified REGIONAL DIFFERENCES: WIDE (10-15 YEARS) AND PERSISTENT CENTRO NORD MEZZOGIORNO Anno

19 Ultra-slow regional convergence (Life expectancy at birth) Longest lived region minus shortest lived region (average): 10 years 12 years 5 years WAR YEARS

20 The distribution of death, by age and gender

21 Child labor

22 ILO (1996) & JOURNAL OF ECONOMIC LITERATURE (1999) 1950 IT:EU = 5: IT:EU = 4: IT:EU = 8:1

23 The gloomiest chapter in Italian social history

24 Education (Years of schooling)

25 Education (Gross Enrolment Rates, 1860-today)

26 The timing of progress

27 Dynamics of absolute improvements in well-being Life expectancy vs. GDP per capita

28 THE SECOND QUESTION Did Italy grow equal? Please note: For most countries the long-run change of the income distribution is an uncharted territory.

29 How to Estimate Income Inequality For Epochs When Survey Data Are Not Available? Three highly reputed schools for ancient-inequality wizards: 1) Eclectic sources and ingenious methods: from occupational pay ratios to the Window Tax. [Lindert and Williamson] 2) Tax records [Atkinson, Piketty et alia] 3) Social tables [Soltow, and more recently Milanovic, Lindert and Williamson] A new school (desperately looking for adepts): 1) Household budgets + population censuses [Rossi, Toniolo and Vecchi 2001, JEH; Vecchi 2011]

30 IHBD (What I mean by household budget, exactly.) Five Ingredients 1) Year of compilation 2) Geographical location 3) Household size 4) Total income and/or expenditure of the household 5) Household s head occupation Where to find them? Family In short: monographs (F. Le Play and disciples) Journal plenty of articles, sources, official inquiries, thousands private and archives Tribunals thousands of household budgets (civil code requires household accounts to be provided by the trustee of bankruptcy) When worst comes to Public worst: administration administrative synthetic budgets records Synthetic households

31 How to Transform a Collector of Household Budgets into a Statistician in Four Steps 1) Collect as many household budgets as time and budget permit; 2) Organize households into samples centered around census years: 1861, 1871, 1881,, 2011; 3) Use population censuses to create weights (expansion factors); 4) Associate households to weights, and carry out weighted estimates only.

32 Step 1: Collect Household Budgets

33 Step 2: Construct samples CENSUS YEAR Adjustments: I. Inflation (easy, yearly temporal CPIs are available) II. HOUSEHOLD BUDGETS Spatial cost-of-living differences (hard, spatial CPIs are not available, they need to be estimated )

34 IHBD Samples Number of households

35 Step 3: Post-stratification (weights are created) Sample 1881 AGRICULTURE INDUSTRY SERVICES ALL NORTH-WEST NORTH-EAST CENTER SOUTH ISLANDS , , , ,452 8, , ,952 41,275 20, ,646 8,034 8,279 Each of the 109 north-western industrial households in the sample is taken to represent 19,920 individuals in the population ,589 19,625 40, ITALY ,130

36 1881 Expansion factors

37 Density Density Density Density Density Density Density Density 10-Year Interval Snapshots e e Per Capita Income (Lire/person/year) Per Capita Income (Lire/person/year) Per Capita Income (Lire/person/year) e e Per Capita Income (Lire/person/year) Per Capita Income (Lire/person/year) Per Capita Income (Lire/person/year) 4.0e e e e e e e-04 and similarly for 1941, and e e Per Capita Income (Lire/person/year) Per Capita Income (Lire/person/year)

38 Methodological Issues When it comes to estimating inequality on the basis of multifarious data referees sharpen their knives Cowell and Victoria-Feser (1996) Practitioners experience + common sense warn about sensitivity of estimates to data and methods chosen. We opt for parametric models, estimated by the maximum likelihood method.

39 The Gini index, 1861-today

40 Conclusions 1) Living standards have improved dramatically, by any standards. All in all, Italy can proudly celebrate its 150 th anniversary. 2) GDP per capita provides a partial view of secular evolution of Italians well-being. Timing differs between GDP and non-monetary indicators. International convergence looks better with non-monetary indicators than with GDP alone.

41 Conclusions (continued) 3) Great progress in basic living standards infant mortality, primary education at the beginning and up to first globalization. 4) During interwar years progress slows down, but does not stop. But need to account for political freedom and civil rights missing dimension in our analysis. 5) Greater well-being improvements in 1970s than during the economic miracle s years.

42 The Historical Household Budgets project (HHB)

43 La mappa dei bilanci di famiglia nel mondo, ca

44 About ready to start the pilot (

45 Conclusion Donate your household budgets now! Period: ca to the present day Geographic coverage: World

46 Many thanks for your attention