Income inequality is becoming an increasingly important indicator that affects the level of satisfaction of the population in developed countries. Given that income inequality in developed countries has allegedly been increasing in the last few years, studying trends in income inequality has indeed become an important topic for policymakers, economists and sociologists. Italy is a country with a high level of income inequality compared to other European countries. This thesis examines aspects of income inequality in Italy in relation to the country development as well as tries to address in detail selected social factors that appear to be most related to income inequality there.
The level of income inequality in a specific country often depends on the number of subgroups and their importance. In developing countries, for example, large differences between ethnic groups and races, urban and rural share are expected to affect the level of income inequality. Household income inequality in Italy is relatively high and proves to be a result of high market income inequality and a poorly designed system of taxes and duties. Understanding income inequality in Italy also means understanding the relationship between the country's North and South, as regional differences play an important role in the income dispersion as a whole.
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