The determinants of Italy’s regional imbalances over the long run: exploring the contributions of human and social capital

Emanuele Felice

Autonomous University of Barcelona and University of Siena

Abstract

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.

JEL keywords: regional history, human capital, social capital, convergence

JEL codes: E13, E24, N93, N94, R11