Annual Wages in the Kingdom of the Two Sicilies from 1800 to 1860 and the Beginning of the Italian Regional Divide

Francesco M S Fiore Melacrinis

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When did regional divergence begin in Italy?

This paper answers this question by analyzing annual wage series from the North, Centre, and South of Italy, leading up to 1861.

When using annual wages, historical economic studies often face a true challenge when considering in-kind compensation, a common practice in past labor markets. The scarce documentation of such payment complicates the use of annual wages. To address this, the study offers a methodology that reconstructs annual real wages, accounting for potential in-kind payments, even when data is scarce. This approach, grounded in economic principles and historical sources, assumes that workers employed annually would at least secure a year’s consumption basket.

Seeking to deepen the discourse on Italy’s regional economic divide, this article contrasts the reconstructed annual wage series for Southern Italy with existing data from the North and Centre. The findings spotlight the early emergence of Italy’s economic disparities.

As shown in the figure presented in the paper (and reported below) at the moment of Italy’s unification, a pronounced wage divergence was evident. The paper reveals that this North-South divide began taking shape in the 1820s and 1830s.


Annual Real Wages,
Kingdom of Sardinia, Grand Duchy of Tuscany and Kingdom of Two Sicilies


Further analysis in the paper identifies two distinct divergence trajectories. In rural settings, Northern wages outstripped those in the South, indicating a stronger economic momentum in the Northern countryside for all the period considered.

In urban contexts, while cities initially showcased wage convergence, Naples experienced a decline in real wages from the 1820s. This decline coincided with the Restoration process, characterized by resistance to modernization and a leaning towards preserving the pre-existing order.

The presence of latifundia, large estates, particularly in the rural South, influenced human capital and political dynamics. This fostered institutions, both formal and informal, that maintained the status quo. Contrary to their Northern and Central peers, Southern elites advocated policies that protected their interests, often at the expense of the populace.

This study provides a nuanced perspective on Italy’s historical economic fabric. It highlights the early roots of regional disparities and underscores the significant influence of socio-political decisions on modernization and economic pathways of the “Two Italies”.