Understanding Inequality Trends:Microsimulation Decomposition for Italy

49 Pages Posted: 21 Feb 2008

See all articles by Carlo V. Fiorio

Carlo V. Fiorio

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM)

Date Written: February 2006

Abstract

This 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.

JEL Classification: D31, D63, C51

Suggested Citation

Fiorio, Carlo V., Understanding Inequality Trends:Microsimulation Decomposition for Italy (February 2006). LSE STICERD Research Paper No. 78, Available at SSRN: https://ssrn.com/abstract=1094870

Carlo V. Fiorio (Contact Author)

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM) ( email )

Via Conservatorio, 7
Milan, 20122
Italy

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