Any history of the wellbeing of the Italians that ignores the sphere of economic inequality would be incomplete and unsatisfactory. That is why this chapter presents a quantitative reconstruction of income inequality in Italy since 1861, the year the Kingdom of Italy was founded. Estimates are based on a most innovative and unique collection of family accounts—the Italian Household Budget Database—where more than 20,000 family records have been organized and linked to modern survey data. For no other countries do such long-run, methodologically consistent and theoretically grounded series exist. In the long run Italian economic growth has been accompanied by a decrease in income inequality: this makes Italy a little-known success story. Inequality has started to increase again since the early 1990s and the barometer of the country’s social indices by now points to a clear worsening of the situation.
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