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Understanding inequality trends: microsimulation decomposition for Italy

Carlo Fiorio ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

Keywords: Microsimulation; counterfactual analysis; household inequality trend; inequality decomposition. (search for similar items in EconPapers)
JEL-codes: C51 D31 D63 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2006-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://eprints.lse.ac.uk/6544/ Open access version. (application/pdf)

Related works:
Working Paper: Understanding Inequality Trends:Microsimulation Decomposition for Italy (2006) Downloads
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