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Modelling the dynamic effects of transfer policy: the LINDA policy analysis tool

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  • Paolo Lucchino
  • Dr Justin van de Ven

Abstract

This paper describes a structural dynamic microsimulation model that generates individualspeci?c data over a range of demographic and economic characteristics at annual intervals overthe life-course. The model is speci?cally designed to analyse the distributional implications of policy alternatives in terms of their bearing on income and consumption measured over alternative time periods, from one year up to the entire life-course. This focus on economic characteristics measured over appreciable periods of life motivates endogenous simulation of savings and labour supply decisions, taking explicit account of uncertainty regarding the evolving decision environment. Re?ecting the demands of policy makers, and in contrast to the majority of the associated literature, the model described here is designed to project from data observed for a population cross-section.

Suggested Citation

  • Paolo Lucchino & Dr Justin van de Ven, 2013. "Modelling the dynamic effects of transfer policy: the LINDA policy analysis tool," National Institute of Economic and Social Research (NIESR) Discussion Papers 405, National Institute of Economic and Social Research.
    • Handle: RePEc:nsr:niesrd:405
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    References listed on IDEAS

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    1. Chris Skinner & Nigel Stuttard & Gabriele Beissel-Durrant & James Jenkins, 2002. "The Measurement of Low Pay in the UK Labour Force Survey," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(s1), pages 653-676, August.
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    6. Skinner, Chris, et al, 2002. "The Measurement of Low Pay in the UK Labour Force Survey," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(0), pages 653-676, Supplemen.
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    9. Thompson, Jamie & Hasan Bakhshi & Nick Oulton, 2003. "Modelling Investment When Relative Prices Are Trending: Theory and Evidence for the UK," Royal Economic Society Annual Conference 2003 203, Royal Economic Society.
    10. Stephen Hicks & Sarah Conn & Jenny Johnson, 2009. "Characteristics of those paid below the National Minimum Wage," Economic & Labour Market Review, Palgrave Macmillan;Office for National Statistics, vol. 3(1), pages 67-73, January.
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    12. Gabriele B. Durrant & Chris Skinner, 2006. "Using data augmentation to correct for non‐ignorable non‐response when surrogate data are available: an application to the distribution of hourly pay," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 169(3), pages 605-623, July.
    13. Chris Skinner & Nigel Stuttard & Gabriele Beissel‐Durrant & James Jenkins, 2002. "The Measurement of Low Pay in the UK Labour Force Survey," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(supplemen), pages 653-676, December.
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    Cited by:

    1. Justin van de Ven & Paolo Lucchino, 2013. "Empirical Analysis of Household Savings Decisions in Context of Uncertainty: A Cross-Sectional Approach," Melbourne Institute Working Paper Series wp2013n21, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    2. Justin van de Ven & Paolo Lucchino, 2013. "Modelling the Dynamic Effects of Transfer Policy: The LINDA Policy Analysis Tool," Melbourne Institute Working Paper Series wp2013n20, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

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    More about this item

    Keywords

    Dynamic Programming; Savings; Labor Supply;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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