Widening the gap. The influence of inner areas in the income inequality in Italy

Using administrative municipality-level data on fiscal declarations, we estimate the influence of ‘inner areas’ in the income distribution across Italy. To do that, we apply influence function regressions methods developed by Firpo et al. (Econometrica 77(3):953–973, 2009) to examine to what extent rurality and inner areas affect income inequality measures. Results highlight that inner areas have a positive effect in the Gini index, and a negative one in mean and median income. These effects are stable, in terms of magnitude, from 2012 to 2015. They hold even when controlling socioeconomic characteristics and region-level fixed effects. Impacts turn out to vary across Italian macro-regions.