Policy Analysis Using a Microsimulation Model of the Italian Households

  • Carlo Bianchi
  • Marzia Romanelli
  • Pietro A. Vagliasindi
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 551)

Summary

In this paper, we apply a dynamic microsimulation approach, which allows us to examine the evolution of the system as a whole and at the same time to focus our attention on the different typologies of workers and pensioners. The latter objective is achieved by simulating individual reactions to systemic changes, while taking into account the regional dimensions. This technique also enables us to perform a general micro-analysis of the effects of past reforms on family pension-income distribution and average individual pension-benefits. The analytical framework used is the dynamic microsimulation model MIND, jointly developed by the University of Parma and Pisa, that incorporates behavioural analysis of individual choices of retirement age, derived from the Stock-Wise [24] option value model. We also perform sensitivity analysis on the model. This represents a valuable technique for treating uncertainty in input variables and for testing the robustness of the simulation results to possible changes in the macroeconomic scenario. In particular, we measure the economic impact resulting from alternative values of the income growth rate and the real interest rate as well as the effect of different distributions of the education degree reached by the individuals.

Key words

pension reforms income distribution sensitivity analysis 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. 1.
    Aaron H (1966) The Social Insurance Paradox, Canadian Journal of Economics 32: 371–379Google Scholar
  2. 2.
    Atkinson AB (1983) The Economics of Inequality. Clarendon Press OxfordGoogle Scholar
  3. 3.
    Aaron H (1966) The Social Insurance Paradox, Canadian Journal of Economics 32: 371–379Google Scholar
  4. 4.
    Banca d’Italia (1997) I bilanci delle famiglie italiane nell’anno 1995. Supplemento al bollettino statistico 14, Banca d’Italia RomaGoogle Scholar
  5. 5.
    Bianchi C, Romanelli M, Vagliasindi P (2001) Inequality and poverty among pensioners: microsimulating the role of indexing lowest pensions to wages, ECOFIN Discussion Papers, Università di ParmaGoogle Scholar
  6. 6.
    Bianchi C, Romanelli M, Vagliasindi P (2003) Validating a dynamic microsimulation model of the Italian households. In this volumeGoogle Scholar
  7. 7.
    Cannari L, Nicoletti Altimari S (1998) A microsimulation model of the Italian household’s sector. In: Le previsioni della spesa per pensioni, ISTAT, Annuali di statistica, Serie 10, 16:103–134Google Scholar
  8. 8.
    Champernowne DG, Cowell FA (1998) Economic inequality and income distribution, University Press CambridgeGoogle Scholar
  9. 9.
    De Sandre P, Pinnelli A, Santini A (eds) (1999) Nuzialità e fecondità in trasformazione: percorsi e fattori del cambiamento, Il Mulino BolognaGoogle Scholar
  10. 10.
    Homer S, Sylla R (1991) A History of Interest Rate. Rutgers University Press LondonGoogle Scholar
  11. 11.
    Morrison R J (2000) DYNACAN, the Canada Pension Plan Policy Model: Demographics and Earnings Components. In: Gupta A, Kapur S (eds) Microsimulation in Government Policy and Forecasting, North-Holland AmsterdamGoogle Scholar
  12. 12.
    Neufeld C (2000) Alignment and Variance Reduction in DYNACAN. In: Gupta A, Kapur S (eds) Microsimulation in Government Policy and Forecasting, North-Holland AmsterdamGoogle Scholar
  13. 13.
    Shorrocks AF (1995) Revisiting the Sen poverty index. Econometrica 63:1225–1230MATHGoogle Scholar
  14. 14.
    Stock JH, Wise DA (1990) Pensions, the option value of work, and retirement. Econometrica 58:1151–1180Google Scholar
  15. 15.
    Tucci MP (1998) Stochastic Sustainability. In: Chichilninsky G, Heal J, Vercelli A (eds) Sustainability: Dynamics and Uncertainty, Dordrecth, Kluwer ed., pp. 151–169Google Scholar
  16. 16.
    Vagliasindi P (1999) Riforma del TFR e futuro del sistema pensionistico. ECOFIN, Discussion Paper Series, n.2, Università degli Studi di ParmaGoogle Scholar
  17. 17.
    Wolf DA (2001) The role of microsimulation in longitudinal data analysis. Papers in Microsimulation Series, N6, Syracuse University, SyracuseGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2005

Authors and Affiliations

  • Carlo Bianchi
    • 1
  • Marzia Romanelli
    • 2
  • Pietro A. Vagliasindi
    • 3
  1. 1.University of PisaPisa
  2. 2.Sant’Anna School of Advanced StudiesItaly
  3. 3.University of ParmaParma

Personalised recommendations