The drivers of income inequality and electoral behaviour in Italy

This thesis has two main aims. First, it investigates the main determinants of income inequality in Italy at the provincial level between 2004 and 2019. Two income definitions are employed: market income—the sum of financial and rental income and labour income including social security contributions and taxes, but excluding pensions and monetary transfers—and gross income, which adds government cash transfers such as old-age pensions. This distinction allows the analysis to capture the role of redistributive policies. Income inequality is examined using the Gini index and across the income distribution at the 20th, 40th, 60th, 80th, and 100th percentiles. The results indicate a non-linear relationship between economic growth and income inequality: lower-income groups benefit at low levels of GDP, but their gains diminish at higher levels of GDP, whereas top-income groups do not benefit at low GDP levels and experience increasing gains at higher levels of GDP. Redistribution appears to mitigate adverse outcomes for lower-income groups at high levels of GDP and, more generally, has a smoothing effect across the income distribution, except for top-income groups. These findings are confirmed by the IV strategy. Labour-market structures are key correlates of inequality: public-sector and manufacturing employment are associated with lower inequality, while part-time work erodes income for lower- and middle-income groups. Pensions and regular immigration consistently reduce inequality, whereas technological change contributes to labour-market polarisation. Overall, income gains remain uneven, reflecting persistent structural and institutional characteristics of the Italian economy. Second, the thesis explores how changes in income distribution are associated with electoral behaviour at the municipal level from 2001 to 2022, covering six elections to the Chamber of Deputies. The analysis focuses on voter turnout—which has declined over time—and on voting patterns for major political parties, assessing whether the effect of inequality on electoral behaviour is mediated by municipal income levels. The results indicate that income inequality is unevenly associated with electoral behaviour: it correlates with lower turnout in poorer municipalities and higher participation in wealthier ones. This asymmetry extends to party preferences, with inequality negatively associated with PD support in low-income areas, positively associated with FdI, and not significantly related to Forza Italia. A geographical dimension also emerges, with inequality shaping electoral behaviour primarily in well-connected central areas, while no systematic association appears in inner areas.