An Analysis of Interregional Migration in Italy

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Chapter 1 – Introduction 
 
 
Migration of people across different areas has been studied as a complex 
phenomenon involving mainly demographic and economic aspects (Etzo, 2008), and 
is recognized to be an important mechanism through which the geographical 
distribution of people changes over time (Greenwood, 1997). Italy has a long history 
of internal migrations characterized by relative differences between different areas, 
in particular North and South. Dualism, alongside differences in productivity and 
local labour market conditions, have boosted migration and interfered in the process 
of growth and convergence. Classical macroeconomic models consider migration as 
an equilibrating mechanism that reduces differences among regions with respect to 
key economic variables (e.g. unemployment, per capita income) (Etzo, 2008). 
However, despite a history of significant structural change and intense migration 
flows, the empirical evidence does not show substantial convergence between Italian 
regions. This is an aspect that many researchers have for long stressed and that 
remains unsolved (Capasso et al., 2011). 
Italy is divided into twenty administrative regions, each charactherized by a 
strong linguistic and cultural identity. Since the unification of Italy in 1860, there has 
been an increasing gap between Northern and Southern regions in terms of economic 
development, as well as the emergence of strong internal migration flows. Despite 
significant economic differences between these two Italian areas, there has been a 
marked drop in migration rates between the mid-1970s and mid-1990s, followed by a 
sharp turnaround in more recent years. 
Following the studies of various authors (Basile & Causi, 2005; Piras, 2010; 
Etzo, 2010; Napolitano & Bonasia, 2010; Biagi et al., 2011), this dissertation 
investigates the determinants of interregional migration in Italy, and consider how 
migrants respond to changes in economic factors. In particular, the main interest is to 
investigate the role of macroeconomic variables in determining the intensity and 
direction of observed migration flows. In order to do so, we utilise an extended 
Gravity model (Lee, 1966), where regional levels of GDP and unemployment are 
considered alongside distance and population size as the main determinants of
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migration. Gravity models were one of the first formal models of migration and 
remain the most common theoretical framework in empirical migration analysis 
concerning migration flows. 
The remainder of the dissertation is organized as follows. Chapter 2 introduces 
the historical background of the Italian migration and gives an insight into the 
“empirical puzzle” that has characterized migration between the mid-1970s and mid-
1990s, and the “Southern Question” which has not been resolved following the 
unification of Italy. Chapters 3 and 4 present a selected migration literature review, 
both theoretical and empirical, dealing with the determinants of internal migration 
flows. Chapter 5 describes the data and methodology employed in the empirical 
analyses. Chapter 6 presents the empirical results and analysis, and provides an 
economic interpretation of the key findings. Finally, chapter 7 provides some 
conclusive remarks.
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Chapter 2 – Italian migration history 
 
2.1 – Historical background 
Since the end of the Second World War the Italian economic system has been 
transformed radically and a steady increase of the per capita income occurred 
throughout the years in all Italian regions. A once large prevailing agriculture sector 
has shrunk in favour of the industry and services sectors. However, the distinction 
between advanced sectors (industry and services) and backward sectors (agriculture) 
which characterises many dual economies, is accompanied in Italy by a severe 
dichotomy between North and South, with the South chronically lagging behind 
(Capasso et al., 2011). 
Evidence of Italian migration is reported in Figure 2.1 and can be traced to the 
period of unification which has characterised Italian economic history for over a 
century. Between 1861 and 1985, it is estimated that more than 26 million italians 
migrated abroad (Del Boca & Venturini, 2003). This large-scale migration away 
from Italy is referred to as the “Italian diaspora” and it is considered the biggest mass 
migration of contemporary times. 
 
Figure 2.1 Italian migration abroad in thousands, 1876-1981. 
(Source: Golini & Birindelli, 1990 in Del Boca & Venturini, 2001.)
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Over the second half of the last century, interregional migration flows in Italy 
have gone through different phases. These can be summarised in three main trends. 
The first one, which dominated the 1950s and 1960s, was characterized by intense 
migration flows, mainly from rural to urban areas and from South to the more 
industrialised North. A considerable increase in labour demand from the big 
industries, located mostly in the North-West
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, triggered the migration of people 
working in the rural Southern regions, acting as a “pull” factor. Similarly, but in 
opposite direction, the excess of labour supply in the agricultural sector played an 
important role as a “push” factor, boosting the migration from the sending regions.  
From the early 1970s internal migration markedly declined, a trend which 
persisted till the mid 1990s. Differentials in per capita incomes and unemployment 
rates, however, were still substantially high and did not decrease during this second 
period (Faini et al., 1997). In fact, during this period migration rates seemed not to be 
strongly correlated with unemployment and income differentials. The main feature of 
the second cycle of internal migration flows, therefore, is the mismatch between 
internal migration and regional disparities. Falling migration rates despite the 
presence of strong regional disparities has become known as the “empirical puzzle” 
and the failure of traditional theory to explain such a phenomenon has attracted the 
interest of many researchers (Etzo, 2010). 
Finally, after the mid 1990s internal migration flows grew again with a 
significant flow of migrants from Southern to Northern regions, as reported by the 
Italian National Institute of Statistics (ISTAT). Importantly, whilst the main 
geographical patterns of these flows has not changed (i.e., from South to Centre-
North), its composition reveals some interesting changes. For instance, during the 
period 1950-1970, migrants leaving the Southern regions of Italy were very young 
and with low educational attainment. By contrast, the young migrants of more recent 
years have been shown to be more skilled and five years older (on average) than 
migrants during the 1960s (Etzo, 2010). 
 
                                                 
1
 The so called “industrial triangle” (i.e., Turin-Genoa-Milan)
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2.2 – The “Empirical Puzzle” 
 
As drawn previously, the pattern of migration between the mid-1970s and mid-
1990s has been referred to as the “empirical puzzle” to indicate that, despite 
increasing differentials in regional unemployment levels, mobility levels fell and 
internal migration rates were surprisingly lower than in previous decades. The 
reasons for this slow down in migration are still not entirely clear and various 
explanations have been proposed by different studies (Biagi et al., 2011). 
Attanasio et al. (1991) argue that past governments have used pensions as a 
discretionary income subsidy, especially in the South, thereby increasing disposable 
income in Southern households. This increase in disposable income in Southern 
regions favoured by family and government support may explain the observed 
decline in the propensity to migrate since any increase in net household income will 
lower the expected net benefit of migration. Fachin (2007) analyses the determinants 
of internal migrations during the period 1973-1996, and provides some empirical 
support for this hypothesis. 
Faini et al. (1997) provide a further explanation for the “empirical puzzle”, 
arguing that the combination of interregional job mismatching and high mobility 
costs could explain the marked fall in migration rates between the mid-1970s and 
mid-1990s. Over this period, job agencies in Italy were publicly operated legal 
monopolies which provided no training or information on job vacancies in other 
regions (Etzo, 2010). This lack of information invariably resulted in an excessive 
reliance of the unemployed on local networks when undertaking job search activities. 
Punitive housing taxation and rent controls also served to increase the costs of 
geographical mobility. Indeed, Faini et al. (1997) and Cannari et al. (2000) both 
report evidence that housing market differentials discouraged interregional migration 
in Italy between the mid-1970s and mid-1990s. 
One final explanation for the empirical puzzle comes from the significant 
translocation of labour demand over this period from the North-West region to the 
North-East. Technological progress and changes in industrial structures required 
more qualified and specialised workers than generic workers that had been hired in