This article develops theoretical and practical motivations for studying the functional distribution of income in the past. Italy is adopted as a case study, because of the availability of long-run estimates on personal inequality and of the long-lasting incidence of self-employment. New labor shares for 1895–1970 show Italian workers accruing a low share of income until 1945; by the end of the 1950s, they rapidly converged to the European average. Italian history shows that functional income distribution deepens our understanding of long- and short-run distributional trends and makes a compelling case for approaching inequality by combining diverse sources and methodologies.
The Italian contribution to the emergence of modern inequality measurement has been, so far, mainly discussed from a methodological standpoint, or has focused on Vilfredo Pareto’s theoretical contribution. This article offers a first survey of the Italian empirical literature on measuring inequality, from the earliest contributions in the 1890s to the end of the interwar decades, discussing the motivations and the sociopolitical milieu in which this literature developed.
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