Income distribution in Italy: A nonparametric analysis

Using kernel density estimation, this paper describes the real income distribution and how it evolved over time in Italy. Data are cross-sectional samples from the population of Italian households during the period 1987-1998. A non parametric test is applied to asses whether the observed changes in the distribution are statistically significant, while the presence of more than one mode in the distributions is investigated by a bootstrap test. Empirical results show that the Italian income distribution significantly changed over time, accompanied by a decreasing inequality pattern until 1991 and a subsequent rise. No marked income gains were perceived, while the real "losers" of the decade seem to be households in the middle-upper income range. © Springer-Verlag 2001.