Wealth inequality, redistribution and local development: the case of land reform in Italy

The role of wealth inequality for local development has long been neglected, although some literature has pointed out its relevance in explaining entrepreneurial and education investment. Among the typologies of assets composing individuals’ wealth, land is of paramount importance in underdeveloped economies specialised in agriculture. Land reforms in terms of redistribution of land ownership are hence expected to boost development through an increase in entrepreneurship rate and human capital stock. In this paper, we consider land reform in Italy, which took place in the 1950s in specific areas across the country. By adopting an Oaxaca-Blinder regression method and using data at a city level on the implementation of the reform for Puglia–Basilicata–Molise in the South of Italy and, as robustness checks, for Maremma in the Centre and Delta del Po in the North of Italy, we have found a positive impact of land redistribution on human capital accumulation and a less significant impact on employment and firm location.