No. 390 - Inequality of individual incomes and the role of the household in Italy

The paper compares income inequality of households and individuals. Obviously, the latter is greater than the former; in fact households operate a broad redistribution of resources both between earners and non earners (children, unemployed, housewives), and between earners of unequal income. This redistribution, which partially reflects the different roles of the members of a household (i.e. between paid or unpaid work) has deep social and economic implications. The paper shows that the redistribution of income (from labour and from transfers) within the household is able to compensate for between 70 and 90 per cent of income inequality among individuals, depending on the statistical index used. However, the equalising effect of household redistribution is declining; while the income inequality of individuals has declined over time, that measured after household redistribution has taken place has remained almost constant.