Empirical essays on income inequality and finance

This thesis deals with investigating the link between the pervasive role of finance and the level of income inequality, by adopting different methodologies and approaches, both macro and micro. Indeed, in the first chapter I have studied how different dimensions of financial development, namely the size, the financial structure and banking efficiency have affected the level of inequality in a sample of worldwide economies. In the second chapter I have also explored the impact of structural banking deregulation on top income inequality in Italy and Canada, by finding that banking reforms have boosted the top income shares.In the final chapter, by focusing on the case of Italy and its pervasive banking deregulation wave in the early 1990’s, I have investigated whether structural banking deregulations, aiming at privatizing the banking system and allowing for the universal bank model, have affected the households’ ability to smooth consumption and insure against transitory and permanent income shocks. Interestingly, financial institutional changes might significantly matter in terms of income distribution and resource allocation.