Wages, productivity and the evolution of the labour share in Italy. a sectoral analysis through national accounts

The paper explores the long-term evolution of the functional distribution of income in Italy. Specifically, we calculate the adjusted wage share (labour share) for the period 1970–2020 starting from national accounts data provided by the Italian National Institute of Statistics (ISTAT). In addition to the total economy, we focus on four macro-sectors, namely: i) the non-agricultural private sector (excluding real estate), ii) the manufacturing sector, iii) commercial and professional services, and iv) financial and network services. We discuss those trends in connection with the dynamics of productivity, real wages, and relative prices. Finally, we propose some interpretations of the evolution of the labour share by looking at the macroeconomic outlook and at episodes of institutional change that took place in the period under scrutiny.