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The Origins of the Italian Regional Divide: Evidence from Real Wages, 1861–1913

Published online by Cambridge University Press:  14 March 2019

Giovanni Federico
Affiliation:
Giovanni Federico is Professor of economic history, Department of Economics and Management, University of Pisa and CEPR, Via C. Ridolfi 10, I-56124 Pisa, Italy. E-mail: giovanni.federico@unipi.it
Alessandro Nuvolari
Affiliation:
Alessandro Nuvolari is Professor of economic history, Institute of Economics, Sant’Anna School of Advanced Studies, Pisa, Piazza Martiri della Libertà 33, I-56127 Pisa, Italy. E-mail: alessandro.nuvolari@santannapisa.it
Michelangelo Vasta
Affiliation:
Michelangelo Vasta is Professor of economic history, Department of Economics and Statistics, University of Siena, Piazza San Francesco 7, I-53100 Siena, Italy. E-mail: michelangelo.vasta@unisi.it

Abstract

The origins of the Italian North-South divide have always been controversial. We fill this gap by estimating a new dataset of real wages (Allen 2001; Allen et al. 2011) from Unification (1861) to WWI. Italy was very poor throughout the period, with a modest improvement since the late nineteenth century. This improvement started in the Northwest industrializing regions, while real wages in other macro-areas remained stagnant. The gap Northwest/South widened until the end of the period. Focusing on the drivers of regional trends, we find that human capital formation exerted strong positive effect on the growth of real wages.

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Article
Copyright
Copyright © The Economic History Association 2019 

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Footnotes

We would like to thank Sara Pecchioli for outstanding research assistance and Alberto Montesi for his assistance in bibliographical research. We are particularly grateful to Robert Allen, Gabriele Cappelli, Myung Soo Cha, Stefano Chianese, Claudio Ciccarelli, Emanuele Felice, and Tomas Cvrcek for sharing their data with us. We also thank Ann Carlos, two anonymous referees, and Gabriele Cappelli, Federico Crudu, Emanuele Felice, Laura Magazzini, Paolo Malanima, Pablo Martinelli, Leandro Prados de la Escosura, and Silvia Tiezzi for helpful suggestions. The paper also benefited from the comments of participants at the 6th edition of EH/tune Economic History Workshop (Siena, 2016), the Economic History Society Conference (Royal Holloway London, 2017), the 8th World Congress of Cliometrics (Strasbourg, 2017), and at seminars at the Catholic University of Milan and at the University of Siena.

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