Regional convergence in Italy, 1891–2001: testing human and social capital (original) (raw)
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The article aims to present and discuss estimates of levels of human and social capital in Italy’s regions over the long term, i.e. roughly from the second half of the nineteenth century up to the present day. The results are linked to newly available evidence for regional value added in order to begin to form an explanatory hypothesis of long-term regional inequality in Italy. More particularly, convergence in value added per capita across Italy’s regions is tested (through both cross-section and dynamic panel regressions) in light of the neoclassical exogenous growth approach, which incorporates human capital and social capital as conditioning variables into a long-term production function. On the whole, the results confirm the importance of conditioning variables, i.e. of regional differences in human capital and social capital, but also suggest that their impact significantly changed over the twentieth century, thus supporting the view that, in different periods, conditioning variables are determined by technological regimes.
Regional inequalities in Italy in the long run (1891-2001): the pattern and some ideas to explain it
Department of Economics University of Siena, 2010
The article in the first instance aims to present the pattern of regional inequality in Italy over the long run, through benchmark years, for what regards per capita value added, but also human capital (education) and social capital. Secondly, the Italian case is discussed in view of the neoclassical approach, which incorporates human and social capital as conditioning variables in a long term production function, through both cross-section and dynamic panel regressions. The results are compared with those from descriptive statistics, concluding that the neoclassical modelling can hardly add something more to a mere correlation evidence. As a consequence, this paper explores the viability of alternative approaches, which should properly consider historical changes in technology, in institutions and in the production function, and briefly reviews the research to come in order to implement a dynamic model.
This paper explores the impact of human capital on the productivity, income and life expectancy growth rates of the Italian regions, from 1891 to 2001, by way of conditional regression models. After comparing different indicators, human capital is approximated through a composite indicator of literacy and schooling, named ‘education’; however, changes on the way human capital is measured do not affect the results of the model. The impact of human capital on growth was not uniform over time, varying of intensity and significance according to both the dependant variable and the historical periods. While negligible for life expectancy, in both the cases of income and productivity, it was relevant during the 1891-1911 years, decisive in the 1911-1951 period; statistically not significant in the 1951-1971 interval, again relevant during the 1971-2001 period. Generally speaking the expected role of human capital on the performance of the Italian regions is confirmed, and so its negative impact on Southern Italy disappointing growth, also on the long run. Yet human capital was really decisive only when internal mobility of labour and capital and international openness were both at a minimum, during the 1911-1951 years. In the remaining periods other factors – such as overseas migration during the 1891-1911 years – seem to have counterbalanced or even reversed its impact.
SSRN Electronic Journal, 2000
Does a persistently low endowment of social capital inevitably imply slow growth and lagging behind? We address this question by considering regional growth in the presence of highly heterogeneous social capital stocks. We maintain that the influence of social capital on growth depends crucially on the institutional set up. In particular, we claim that when the withincountry distribution of social capital is highly heterogeneous and policy making is centralized, the local endowments of social capital --which display their effect mainly on the functioning of local institutions --plays a weaker role than when policy is decentralized. Our claim is based on a detailed analysis of the Italian regional divide. Italy, the case study par excellence on social capital, is an ideal case because social capital and per capita income are highly and persistently heterogeneous across regions, and because a deep process of decentralization was adopted in the 1970s, after decades of centralized policy making. Our hypothesis is formally defined by means of an endogenous growth model in which social capital affects the accumulation of public capital, and its influence depends crucially on how (de)centralized is policy making. The model is then calibrated on the long run Italian data considering two macro regions: Center-North and South. We show that low social capital exerted an increased negative influence on growth for the South as a consequence of decentralization, causing a sudden halt of a twenty-year strong process of regional convergence.
2005
Paper prepared for the 45th Congress of the European Regional Science Association Since Solow's (1957) contribution, human capital has a central role in the debate on economic growth as a leading long period development factor. If from a theoretical point of view the role of human capital on economic growth both directly and throughout its use in R&D activities is fully accepted, from an empirical perspective the results are much more controversial, strictly depending on the quality of data. A recent analysis by Aghion and Cohen (2004) put in evidence that high-level human capital has a positive effect on economic performance only if a country is close to the technological frontier: countries that are far from this frontier, specialised in traditional sectors, can growth, almost in the short run, even exploiting medium-level human capital. This analysis lead to consider the link between human capital and growth with a greater detail, trying to disclose the effect of different human capitals in a country, such as Italy, traditionally oriented toward a low/medium technology production. Using, beyond the usual proxies of human capital, some measures of its quality and of its interrelation with R&D sector, we would like to give a new contribution to the analysis of regional growth in Italy in the period 1980-2001. The panel approach, here adopted, allows us to take account of the temporal variability and to check for omitted variable specific for regions and persistent over time.
2005
Since Solow’s (1957) contribution, human capital has a central role in the debate on economic growth as a leading long period development factor. If from a theoretical point of view the role of human capital on economic growth both directly and throughout its use in R&D activities is fully accepted, from an empirical perspective the results are much more controversial, strictly depending on the quality of data. A recent analysis by Aghion and Cohen (2004) put in evidence that high-level human capital has a positive effect on economic performance only if a country is close to the technological frontier: countries that are far from this frontier, specialised in traditional sectors, can growth, almost in the short run, even exploiting medium-level human capital. This analysis lead to consider the link between human capital and growth with a greater detail, trying to disclose the effect of different human capitals in a country, such as Italy, traditionally oriented toward a low/medium t...
Regional disparities in Italy over the long run: the role of human capital and trade policy
The well known Italian dualism in terms of development disparities between the North and the South has been one of the most debated issues in economics over the last few decades. In the aftermath of the Unification of Italy, the gap between North and South in terms of human capital stock was more relevant than the dualism in terms of GDP per capita. In 1871 the percentage of population able to read and write was 57.7% in the North-West and only 15.9% in the South, while there is no evidence of income disparities. Interestingly, in 1951 income per capita in Southern regions was only about 50% of that of the North. Bearing this evidence in mind, and using a novel panel dataset, we investigate the pattern of regional development focusing on the role of initial human capital conditions as a major driver of growth over the period 1891-1951. We provide further empirical evidence on the impact of protectionist trade policies in the late 19th century on long run development. We find that a numerically large human capital stock in the North provided fertile soil for early industrialization, while the protection of agriculture resulted in an incentive for the South to specialize further in the primary sector, which turned out to be harmful in the long run.
Human capital and economic growth. An exploration into the Italian regions (1891-2001)
During the last fifty years human capital has won a prominent candidature as one of the main sources of economic growth, although its relevance has not always been proven. 1 Few years after the notion of human capital had made its appearance in the economic literature (Schultz 1960, Becker 1964), economic historians began to investigate the relation between the spread of mass education and the development of the Western world (Cipolla 1969).
Universitat Autònoma de Barcelona. Departament d’Economia i d’Història Econòmica. UHE Working Paper 2013_08, 2013
The paper presents up-to-date estimates of Italy’s regional GDP, with the present borders, in ten-year benchmarks from 1871 to 2001, and proposes a new interpretative hypothesis based on long-lasting socio-institutional differences. The inverted U-shape of income inequality is confirmed: rising divergence until the mid-twentieth century, then convergence. However, the latter was limited to the centre-north: Italy was divided into three parts by the time regional inequality peaked, in 1951, and appears to have been split into two halves by 2001. As a consequence of the falling back of the south, from 1871 to 2001 we record σ-divergence across Italy’s regions, i.e. an increase in dispersion, and sluggish β-convergence. Geographical factors and the market size played a minor role: against them are both the evidence that most of the differences in GDP are due to employment rather than to productivity and the observed GDP patterns of many regions. The gradual converging of regional GDPs towards two equilibria instead follows social and institutional differences − in the political and economic institutions and in the levels of human and social capital − which originated in pre-unification states and did not die (but in part even increased) in post-unification Italy.
The socio-institutional divide. Explaining Italy's regional inequality over the long run
Carlo Alberto Notebooks, 2017
In recent years there have been major advances in the research about the historical pattern of regional inequality in Italy and its historical roots: new and more accurate estimates of regional GDP, as well as of social indicators (human capital, life expectancy, HDI, heights, inequality, social capital) and other indices (market potential), running roughly from around the Unification to our days, are now available. By the light of this up-to-date information, the article reviews the debate about the determinants of regional development in Italy, within the broader framework of the country's industrial takeoff and modern economic growth, and connects it to the main strands of the international literature. After critically discussing the competing hypotheses proposed to account for the different patterns observed and the North-South divide, a different explanation-and the main argument of the article-is presented: a North-South socioinstitutional divide pre-existed Unification, in some respects grew stronger with it and was never bridged throughout the history of post-Unification Italy; such a divide ultimately impacted on the levels of human and social capital, as well as upon differences in policies and institutional performance, and thus on economic growth.