IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Regional Differences in Growth Rates: A Microdata Approach

  • Luca Pieroni


  • David Aristei


The aim of the present study is to analyse the dynamics of regional consumption and income to explain two significant empirical evidences that have characterized Italian economy in the last two decades: (i) the fall in private saving rate; (ii) the persistence of a wide gap between consumption and income levels of Central-Northern and Southern areas of Italy. The theoretical framework adopted to investigate the effects of economic growth on saving is based on the life cycle hypothesis (LCH) (Modigliani and Brumberg, 1954). As highlighted by recent empirical works, the effect of economic growth on individual saving rates strictly depends on how labour income is affected by growth (Deaton and Paxson, 2000). In this study, we provide a measure of the impact of productivity changes across generations both at the aggregate level and among regions, by tracking income and consumption behaviours of cohorts of households. Moreover, working with household rather than individual data, we adopt an appropriate equivalence scale in order to account for the different resources and needs of each family member; this problem is particularly significant for countries like Italy, in which the presence of multigenerational household is common. The empirical analysis is based on a series of repeated cross-sections of the Bank of Italy’s Survey of Household Income and Wealth (SHIW) for the period 1989-2002 and consists in the decomposition of the cohort, age and time effects of household’s income and consumption along the line of the works of Attanasio (1998), Jappelli and Modigliani (1998), Jappelli (1999) and Kapteyn et al. (2005). The results obtained in the benchmark model show an increase in the productivity of younger generations in the Central and Northern regions together with a positive and increasing age profile for consumption, while in the South the results are floating. The basic model is successively extended by including the demographic and socio-economic characteristics of the household. From the sensitivity estimations, it clearly emerges that household composition, working status and education levels significantly affect income fluctuations in the South, playing an active role in determining the persistency of growth rate differences among regions.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa06p799.

in new window

Date of creation: Aug 2006
Date of revision:
Handle: RePEc:wiw:wiwrsa:ersa06p799
Contact details of provider: Postal: Welthandelsplatz 1, 1020 Vienna, Austria
Web page:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Jappelli, Tullio, 1999. "The Age-Wealth Profile and the Life-Cycle Hypothesis: A Cohort Analysis with Time Series of Cross-Sections of Italian Households," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(1), pages 57-75, March.
  2. James Banks & Richard Blundell & Sarah Tanner, 1995. "Is there a retirement-savings puzzle?," IFS Working Papers W95/04, Institute for Fiscal Studies.
  3. Deaton, A. & Paxson, C., 1993. "Intertemporal Choice and Inequality," Papers 168, Princeton, Woodrow Wilson School - Development Studies.
  4. B. Douglas Bernheim & Jonathan Skinner & Steven Weinberg, 1997. "What Accounts for the Variation in Retirement Wealth Among U.S. Households?," NBER Working Papers 6227, National Bureau of Economic Research, Inc.
  5. Orazio P. Attanasio, 1993. "A Cohort Analysis of Saving Behavior by U.S. Households," NBER Working Papers 4454, National Bureau of Economic Research, Inc.
  6. Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
  7. Kapteyn, Arie & Alessie, Rob & Lusardi, Annamaria, 2005. "Explaining the wealth holdings of different cohorts: Productivity growth and Social Security," European Economic Review, Elsevier, vol. 49(5), pages 1361-1391, July.
  8. Raffaele Miniaci & Chiara Monfardini & Guglielmo Weber, 2003. "Is there a retirement consumption puzzle in Italy?," IFS Working Papers W03/14, Institute for Fiscal Studies.
  9. Tullio Jappelli, 2005. "The life-cycle hypothesis, fiscal policy and social security," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 58(233-234), pages 173-186.
  10. John K Gibson & Grant M Scobie, 2001. "Household Saving Behaviour in New Zealand: A Cohort Analysis," Treasury Working Paper Series 01/18, New Zealand Treasury.
  11. Angus Deaton & Christina Paxson, 2000. "Growth and Saving Among Individuals and Households," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 212-225, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa06p799. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.