Five evidences on labour productivity and inequality association in Italy

Abstract

In the past two decades, Italy experienced a deceleration in labour productivity growth accompanied by persistently high income inequality. In this paper, we analyze five main empirical evidences for Italy indicating possible common determinants and linkages between productivity growth and income inequality in the period 1995-2018. To the best of our knowledge, the literature investigating this relationship for Italy is still very scarce. According to our preliminary exploration, the association between Italian productivity growth and income inequality between 1995 and 2018 has been mostly negative. This evidence suggests that the gloomy dynamics of productivity might have been an obstacle to income inequality reduction. There is also the possibility, however, that income inequality itself was among the causes of the gloomy productivity growth.