Italy, A Feudal Society

When it comes to inequality, we usually consider the differences in disposable income (or wealth) among citizens at a given time. But one thing to live in a society where there  are inequalities, but also opportunities to climb  the social ladder. In these circumstances a degree of inequality can be positive,  as it provides incentives to improve. Another is to live in a society where the privileges persist from one generation to the next, and the possibility to move up in society are nonexistent: a “feudal” society, where only the rich have access to better schools and jobs. The picture below comes from an interesting paper  of Miles Korak. The horizontal axis shows the Gini inequality index, and the y-axis shows an index of the persistence in income between the generations. This index reflects by how much the incomes of sons reflects the income  of the fathers, and therefore higher levels of the index indicate less social mobility. The figure shows that social mobility is larger in countries where the inequalities are lower. The more egalitarian countries, the Nordic countries, Japan and Germany, are also those with higher social mobility. The most unequal, Peru, South Africa, are also those where the income of sons reflects more (over 70%) that of the fathers.

Italy has an unenviable record: among industrialized countries is second only to U.S. in terms of inequality, and only to Slovenia in terms of  generational mobility. Inequalities between rich and poor are both among the highest and the chances to improve (if you start at the bottom) or worsen (if we start at the top) are among the lowest. The worst possible combination.