DP18224 The Role of Geography in Determining the Inequality between Italians
Regional disparities play a marginal role in determining inequality between Italians, both in cross-section and in a lifetime sense. In spite of large differences in average income between provinces, less than 4% of cross-sectional inequality can be attributed to between-province differences. In contrast, information on industry of similar level of detail can explain roughly a quarter of earnings and wage inequality. The share of between-province variance in lifetime income is 3.4% for the whole cohort and only 1.8% for males. For females, it is as high as 10.2%. Thus, geography is a vector explaining inequality between Italians only in affecting female labor force participation. Finally, knowing the income of a person also does not help predict her province of birth or residence.
