نبذة مختصرة : In this report we study the evolution of poverty and inequality in Italy in the period 1987‐2010. Our data are from the Bank of Italy Survey of Household Income and Wealth and we use price indexes that allow both the dynamics and the levels of real incomes to differ (the reference year is 2009). We construct relative poverty and inequality indexes using equivalent real incomes obtained by applying an equivalence scale widely used in the literature (square root of the number of household members). While we do not intend to be innovative in the measurement of poverty or inequality, our aim is to depict a complete picture of the evolution of poverty and inequality with a particular attention to their determinants. By using decomposable inequality and poverty indexes we look at five decompositions: by gender, geographical areas (North West, North East, Centre and South), class age (less than 30, between 30 and 40, 40 and 50, 50 and 60 and over 60), education (compulsory school or less, upper secondary and tertiary education) and employment condition (employee, self‐employed and unemployed). Given the definition of non‐overlapping groups, when looking at inequality we examine, the relative weights of the “within” and of the “between” components, while ‐when looking at poverty‐ we analyse the so called “poverty risk”. These exercises allow us to understand (i) if inequality originates mostly from within each group or if it mainly depends on the difference between groups and (ii) how each group influences overall poverty (measured by the headcount ratio and by the average squared normalised poverty gap). Finally we consider some counterfactual exercises in order to find out the effects of changes in groups’ demographic composition, in subgroups’ mean incomes (only for inequality) and in the subgroups’ specific inequality or poverty indexes. The results show that the most interesting decompositions are by geographical areas, by educational attainment and by age
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