The Roots of a Dual Equilibrium: GDP, Productivity and Structural Change in the Italian Regions in the Long-run (1871-2011

This paper explores the evolution of Italy’s regional inequality in the long run, from around
Unification (1871) until our days (2011). To this scope, a unique and up-to-date dataset of
GDP per capita, GDP per worker (productivity) and employment, at the NUTS II level and
at current borders, for the whole economy and its three branches – agriculture, industry,
services – is here presented and discussed. Sigma and beta convergence are tested for GDP
per capita, productivity and workers per capita (employment/population). Four phases in the
history of regional inequality in post-unification Italy are confronted: mild divergence (the
liberal age), strong divergence (the two world wars and Fascism), general convergence (the
golden age) and the “two-Italies” polarization. In this last period, for the first time GDP and
productivity, as well as workers per capita and productivity, have been following opposite
paths: the North-South divide increased in GDP, decreased in productivity.