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We analyze the heterogeneous employment effects of financial shocks using a rich data set of job contracts, matched with the universe of firms and their lending banks in one Italian region. To isolate the effect of the financial shock, we construct a firm-specific time-varying measure of credit supply. The preferred estimate indicates that the average elasticity of employment to a credit supply shock is 0.36. Adjustment affects both the extensive and the intensive margins and is concentrated among workers with temporary contracts. We also examine the heterogeneous effects of the credit crunch by education, age, gender and nationality.

The paper examines the geographical variability in house prices, focusing on the gradient from the center to peripheral areas. Our results show large price differentials within the main urban areas, even larger than those observed between the Center-North and South of Italy. The higher real estate prices in the centers of urban areas are affected by centripetal pressures from the demand side, to which supply only partially adjusts. We find that better infrastructure and lower commuting times can, however, mitigate the centripetal pressure on the demand side and flatten the gradient. Finally, we also find a center-periphery gradient for incomes; however the latter is less steep than that of house prices, thus indicating that the ratio between the value of houses and income is higher in the city center and lower in the periphery.

We examine intergenerational mobility in the very long run, across generations that are six centuries apart. We exploit a unique dataset containing detailed information at the individual level for all people living in the Italian city of Florence in 1427. These individuals have been associated, using their surnames, with their pseudo-descendants living in Florence in 2011. We find that long-run earnings elasticity is about 0.04; we also find an even stronger role for real wealth inheritance and evidence of persistence in belonging to certain elite occupations. Our results are confirmed when we account for the quality of the pseudo-links and when we address the potential selectivity bias behind the matching process. Finally, we frame our results within the existing evidence and argue that the quasi-immobility of preindustrial society and the existence of multigenerational effects might explain the long-lasting effects of ancestors’ socioeconomic status.

We analyze the historical origins and subsequent development of the Italian urban system. We show that geography, history, and their interaction crucially explain the distribution of population over space and its evolution over time: Italy was already highly urbanized during the Roman Empire; in the middle ages and in the modern era, the size and location of the Italian cities were heavily affected by the constant threat of military attacks and political fragmentation; urbanization has continued also after the unification of Italy, although the increase of the largest metropolitan areas has lost momentum in the last decades. We argue that these more recent patterns are partly driven by agglomeration dis-economies such as higher congestion and housing costs in the main Italian cities (especially in the Center-North).

The aim of this paper is to present an overview of the results of a recent research project by the Bank of Italy. The paper analyses the interplay between historical origins, congestion costs, and agglomeration benefits in shaping the Italian urban system. It shows that urban agglomeration externalities (on wages, productivity, or innovation) tend to be smaller in Italy than in other developed countries; it also shows that the costs of congestion are relatively high and that high housing cost—explained by both physical constraints and public administration inefficiencies—discourage mobility. These features have a relevant impact on the development of an advanced urban system with possible negative consequences on the country’s ability to grow.

We analyze the effects of Mafia infiltration in the legal economy. Combining information from investigative records with panel data on firms’ governance and balance sheets, we build an indicator of infiltration in firms located in an area with no tradition of Mafia. We show that Mafia targets young and less efficient firms and that infiltration generates a significant rise in firms’ revenues, with no proportionate growth in production inputs and a deterioration of the firm’s financial situation leading to market exit. These findings are consistent with a story of predatory behavior in which infiltration is used for money laundering or rent extraction.

Tax evasion is a widespread phenomenon and encouraging tax compliance is an important and debated policy issue. Many studies have shown that tax cheating has to be attributed to a considerable extent to the tax morale of taxpayers. The aim of the present paper is to shed light on the relationship between the taxpayer and the public sector; specifically, we investigate whether public spending inefficiency shapes individual tax morale. Combining data from Italian municipalities’ balance sheets with individual data from a properly designed survey on tax morale, we find that the attitude towards paying taxes is better when resources are spent more efficiently. This evidence seems not to be driven by some confounding factor at the municipality level or by spatial sorting of citizens and proves robust to accounting for alternative measures of both inefficiency and tax morale. We also find that the negative effect of inefficiency is larger if the level of public spending is lower and/or the degree of fiscal autonomy is higher.

We investigate the impact of information and communication technologies (ICT) on local branch managers’ (LBMs) autonomy in small business lending. Using a unique dataset of nearly 300 Italian banks, we show that banks holding more ICT capital delegate more decision-making power to their LBMs. Evidence from a variety of identification strategies suggests that our results are not driven by unobserved heterogeneity. We also find that the positive effect of ICT on delegation is stronger for banks resorting more to soft information (i.e. those specialized in small business lending and with a longer permanence of LBMs in the same branch).

This analysis aims at studying joblessness and the effect of the economic crisis at the household rather than the individual level. With respect to the main European countries, in Italy the jobless household rate is lower because of the larger household size (the more adults present the lower the risk of joblessness) and the greater propensity to link household formation to employment status. The effects of the economic crisis on the labour market have led to an increase in the jobless household rate. However this increase has been lower than expected, thus suggesting that Italian households have partly absorbed the negative shocks in the labour market. Within households, the job loss is mostly related to young people still living with their parents, reflecting an employment protection system that is segmented on a generational basis.

Local public transport is an important determinant of the growth and the competitiveness of territories. This paper describes the functioning of this public service in the main Italian cities, comparing it internationally and analysing the regional gaps within the country. It highlights the possible effects that well-functioning local public transport systems have on the mobility of people, the labour and the real estate markets, as well as examines the links between its performance and a number of institutional and operational factors. This paper also analyses how this sector fared during the health crisis and outlines some possible scenarios for its evolution in the future.