Based on the Italian Treasury Dynamic Microsimulation Model (T-DYMM), whose base year sample refers to 2015 and is derived from survey data with further enrichment from administrative information, this paper simulates individual and household economic trajectories to focus on the long-term transmission mechanisms of wealth inequality via inter-generational transfers.
The model features probabilistic demographic events, labour market choices and related outcomes, retirement incomes, income taxes paid and in-cash benefits received, as well as consumption, savings and wealth transmission mechanisms at the household level. Among the main findings, given no changes in behaviours and policies over time, we show that net wealth inequality is expected to remain fairly stable until 2040 and then progressively increases in subsequent years. According to our model, the primary driver of such a boost are inter-generational transfers (especially bequests), which are supposed to increase around that time due to the final transmission between Baby Boomers towards Gen-Xers and the beginning of that between Gen-Xers and Gen-Yers.
This event is organised by the Institute for New Economic Thinking at the Oxford Martin School.
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Dr Michele Bavaro
Postdoctoral Research Officer, Department of Social Policy and Intervention & INET Oxford
Michele Bavaro is a Postdoctoral Research Officer in the Department of Social Policy and Intervention & INET Oxford. During his PhD at University of Rome Tor Vergata, he focused on intergenerational mobility; in his post-doc experience at the University or Roma Tre, he worked on income and wealth distributional analysis using a dynamic micro-simulation model and completed a research project on the level and determinants of low-paid workers in Italy.
As part of the DINA ERC Synergy Project he will focus on the topic of rising economic inequality and its drivers and consequences. More generally, he is interested in any topic related to social sciences and open to learn from hard sciences to promote an inter-disciplinary approach to our studies.
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