ECONOMICS OF INEQUALITY

The course provides an introduction to the economics of inequality, with a focus on both theoretical frameworks and empirical evidence. It familiarizes students with economic reasoning applied to key social and economic issues related to inequality.

Basics of Algebra, Microeconomics and Macroeconomics.

Knowledge and Understanding Students will acquire a solid understanding of the main concepts, theories, and empirical approaches to economic inequality. In particular, they will: - understand the principles underlying the measurement of inequality; - be familiar with key indicators and definitions used in the literature; - know the main data sources for the analysis of inequality and poverty. Applying knowledge and understanding: Students will develop the ability to use economic tools to analyse inequality in practice. In particular, they will be able to: - select and apply appropriate measures of inequality in different contexts; - interpret empirical evidence and data on inequality and poverty; - relate theoretical concepts to real-world policy issues and case studies. Making judgement Students will develop independent judgement in the analysis of economic inequality and related policies. This ability will be fostered through lectures and assessed through class presentations. In particular, students will be able to: - critically evaluate empirical evidence and policy interventions; - formulate and support reasoned arguments on inequality and redistribution. Communication skills Students will acquire the ability to communicate effectively their knowledge and analytical results. In particular, they will be able to: - present and discuss their analyses clearly, both orally and in writing; - engage in peer discussion and work effectively in teams.

The course examines the economics of inequality by combining theoretical frameworks and empirical evidence. It is structured around two fundamental questions in the literature, inspired by the work of Amartya Sen and Tony Atkinson: “Inequality of what?” and “What can be done?”. Part I – Concepts and Measurement: The first part focuses on the definition and measurement of inequality, covering different concepts and indicators, including income and life-cycle inequality, as well as inequality within and between groups such as generations, regions, gender, and skills. These dimensions are analyzed in light of their economic and political foundations and discussed using both microeconomic and macroeconomic perspectives, with reference to core theoretical models such as human capital investment. This part is complemented by practical exercises on data sources and inequality indicators. Part II – Core Inequalities: The course examines major dimensions of inequality, including earnings and wealth distributions, health disparities, intergenerational mobility, gender inequality, and assortative mating. Students explore how these inequalities are measured, interpreted, and compared across groups and contexts. Part III – Policy Responses and Evaluation: The second part addresses policy responses to inequality, moving from the analysis of distributions to redistribution. It introduces the theory of redistribution and examines the design and expected effects of public policies, including taxation and both targeted and universal transfers (in cash and in kind). Students are also introduced to methods for evaluating public policies and learn to interpret causal evidence on inequality. Part IV – Student Presentations: The course concludes with student presentations of selected topics, integrating theoretical frameworks, empirical evidence, and policy evaluation.

Detailed references for each topic and lectures material will be provided in class. Students can have a broad overview of research in inequality in: - Stiglitz J. E. (2013). The price of inequality. - Piketty T. (2014). The Capital in the XXI century. - Atkinson A. (2015). Inequality: what can be done? - Lambert P. J. (2001). The distribution and redistribution of income. and at the following links: - https://opportunityinsights.org (Harvard-based lab on spatial inequality in US) - https://wid.world (PSE-based database about trends in income inequality) - https://inequality.stanford.edu (Stanford-based inequality lab) - https://geom.ecineq.org/world-view/ (Global Estimates of Opportunity and Mobility)

Lecture, class discussion, team presentation

In class team presentation and final written examination

Students must have passed the course exam and propose a topic relevant to the course themes.