Southern and Northern Italy in the Great Divergence: New Perspectives from the Occupational Structure

by David Chilosi (King’s College London) and Carlo Ciccarelli (University of Roma Tor Vergata)

This blog is based on the author’s presentation to the 2021 Economic History Society Annual Conference

How did the occupational structure of Southern and Northern Italy evolve in the centuries before unification in (1861)?   What are the implications for our understanding of their comparative development?   The debate on the origin of the North-South divide, blindfolded by a dearth of quantitative data, has so far paid scant attention to what happened before  unification.  The conventional wisdom views the North-South Italian income gap as substantial at the time of the unification.  Revisionist historians disagree, but they tend to  implicitly assume that not much changed between the late Middle Ages and 1800.  Lack of quantitative data on Southern Italy’s pre-modern development has also meant that, to date, debates on Italy’s position in the ‘great divergence’ between Europe and Asia has largely ignored the Southern half of the peninsula.

This paper offers a new quantitative analysis of the comparative development of Southern and Central-Northern Italy in the five and half centuries before  unification.  We focus on  occupational structure because it is a key indicator of economic development: urban sectors (industry and services) tend to exhibit higher productivity and dynamism than agriculture.  Further,  Engel’s law suggests that as income rises, the share of employment in the primary sector declines.  Occupational structure is particularly well-suited to the analysis of the  development of data-scarce, pre-modern economies, because it can be estimated with growing urbanisation.  However, two related obstacles prevented the analysis of occupational structure in Southern Italy.  First,  early Italian censuses were biased, indicating an agricultural occupational share which was too low.  Second, the  presence of big towns and cities which were  inhabited by a large proportion of farmers —  ‘agro-towns’ — made it difficult to extrapolate agricultural employment shares in conjunction with urbanisation rates.  Using conventional thresholds, nineteenth-century Southern Italy appears to be  one of  the most urbanised area of the world – thought not one of the most developed – precisely because several big centres were inhabited by a majority of peasant families.

We overcome the difficulties associated with estimating the occupational structure of pre-modern Southern Italy by relying on a new source: censuses undertaken  by the regional states in the early nineteenth century.  We demonstrate  that these censuses do not suffer from the same biases that affected  post-unification censuses in Southern Italy.  Indeed, they report occupational data by province, which we use to describe contemporary spatial patterns of occupational shares and to estimate by how much the proportion of agricultural workers differed between  Southern and  Central-North Italian cities.   Combining these estimates with urbanisation rates, we extrapolate the evolution of agricultural occupational shares over the very long-run.  To explore the economic implications of the trends that we observe, we exploit the fact that, as income rises, the share of expenditure devoted to  primary products declines.  Further,  we examine  trends in GDP per capita revealed by trends in the occupational structure.

Consistent with the conventional wisdom, but contra to the revisionist view, we find that  agriculture’s occupational share in 1861 was around  10 percentage points larger in the South than in the Centre-North.  The assumption that not much happened before 1800 turns out to be unwarranted: the South experienced slow structural transformation — especially pronounced in the fifteenth and sixteenth centuries.  Conversely, in the Centre-North, the occupational structure was stable.  Consequently, by 1861, the percentage difference in GDP per capita  between the two areas had halved when compared to the peak of the 1350’s (Figure 1).

Turning to international comparisons, we find that Southern Italy was different from the Centre-North: it was initially poorer than the most advanced parts of China, but it became noticeably  richer than China overall at a much later date.  Our estimates are difficult to reconcile with the view  that bare-bone subsistence real wages were representative of standards of living in pre-modern Italy, even for the South.  For  four of our series,  income per capita exceeded subsistence baskets by a factor of between 2.14 and 2.87. In fact, pre-modern Southern Italy emerges as a comparatively well-off region (Figure 2).

To contact the authors:

David Chilosi, david.chilosi@kcl.ac.uk.

Carlo Ciccarelli, carlo.ciccarelli@uniroma2.it