Understanding Inequality Trends:Microsimulation Decomposition for Italy
AbstractThis paper suggests overcoming some limitations of traditional inequalitydecomposition methods by developing a combination of Burtless (1999) and DiNardoet al. (1996), two different microsimulation methods for decomposing inequality. Byusing this combination it is possible to take into consideration the dispersion ofincome sources as well as the socio-demographic evolution of the population understudy, in a single framework and across many years. This methodology maximizesclarity of results and allows one to easily perform tests on results. An application toItalian household inequality is provided to analyze marginal and joint effects ofdemographic trends and changed dispersion of different income factors between 1977and 2002.
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Bibliographic InfoPaper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Distributional Analysis Research Programme Papers with number 78.
Date of creation: Feb 2006
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Web page: http://sticerd.lse.ac.uk/_new/publications/default.asp
Microsimulation; counterfactual analysis; household inequality trend; inequality decomposition.;
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-10-28 (All new papers)
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