Inequality Trends in a Slow-Growing Economy: Italy 1990-2020

This paper presents stylised facts on the labour supply andincome inequality of individuals aged 25–55, drawn fromthe 1989–2020 Bank of Italy Survey of Household Incomeand Wealth. Over the sample period, earnings inequalityhas increased considerably although the gap is smallerwhen considered in terms of household disposable income.We investigate the possible drivers of this increase usingadministrative data on employees. The evidence suggeststhat labour market reforms implemented since the startof the 1990s are the most plausible explanation for thisgrowth in earnings inequality. Comparison between earningsand disposable income suggests that both government andhouseholds are important for reducing inequalities.