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748. The Origins of the Italian Regional Divide: Evidence from Real Wages, 1861-1913

Working paper N. 748 Febbraio 2017

Giovanni Federico

Department of Economics and Management, University of Pisa

Alessandro Nuvolari

Sant’Anna School of Advanced Studies, Pisa

Michelangelo Vasta

DEPS, USiena

Abstract

The historical origins of the long lasting Italian North-South divide have always been controversial, but the scholarly debate has been hampered by the dearth of actual data on the size of the gap and its historical evolution. In this paper, we fill this gap by estimating a new provincial data-set of welfare ratios (Allen 2001) from the Unification of Italy in 1861 to World War One. Italy as a whole was very poor throughout the period, with a rather modest improvement since the late 19th century. This improvement had started in the North-West regions, the cradle of Italian industrialization, in the 1880s, while real wages in other macro-areas (North-East, Centre, South and islands) remained stagnant until the early 20th century, rising sizably only in the pre-war years. The gap between North-West and the South, already substantial in 1861 widened until the very end of the period. The Continental South was poorer than the North East, but not always of the Centre, while real wages in the Islands (i.e. Sicily) were close to national average.

Jel Codes

N33, N01, N13