HHB Working Paper Series


Labour Shares and Income Inequality: Insights from Italian Economic History, 1895-2015

Author(s): Giacomo Gabbuti

Year: 2018

No: 13

JEL Classification: B12, D63, J31, N14, N34

Pages: 38


This paper develops theoretical and practical motivations for studying the functional distribution of income in the past. Italy is adopted as a case study, by reason of the availability of long-run estimates on personal income inequality. The historical importance of self-employment and the recent increase in labour’s share make the Italian historical experience of further general interest. New estimates from 1895 show Italian workers accruing a low share of national income until 1945. By the end of the 1950s and the economic miracle, shares had rapidly converged to the European average. Italian history shows that studying the functional distribution of income deepens our understanding of long run distributional trends, as well as of key distributive episodes, and makes a compelling case for approaching income inequality by combining diverse sources and methodologies.

label icon Keywords: economic inequality, factor shares, functional distribution, Italy, labour share

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