Abstract for:
Understanding Inequality Trends:
Microsimulation Decomposition for Italy
Carlo V. Fiorio,
February 2006
Paper No' DARP 078:
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Keywords: Microsimulation; counterfactual analysis, household inequality trend,
inequality decomposition.
JEL Classification: D31; D63; C51
Is hard copy/paper copy available?
YES - Paper Copy Still In Print.
This Paper is published under the following series:
Distributional Analysis Research Programme
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Abstract:
This paper suggests overcoming some limitations of traditional inequality
decomposition methods by developing a combination of Burtless (1999) and DiNardo
et al. (1996), two different microsimulation methods for decomposing inequality. By
using this combination it is possible to take into consideration the dispersion of
income sources as well as the socio-demographic evolution of the population under
study, in a single framework and across many years. This methodology maximizes
clarity of results and allows one to easily perform tests on results. An application to
Italian household inequality is provided to analyze marginal and joint effects of
demographic trends and changed dispersion of different income factors between 1977
and 2002.