Simulating Long Run Wealth Distribution and Transmission: the role of Inter-Generational Transfers
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.
Date: 2 February 2023, 14:00 (Thursday, 3rd week, Hilary 2023)
Venue: Manor Road Building, Manor Road OX1 3UQ
Venue Details: Seminar Room G and online via Zoom
Speaker: Michele Bavaro (EEG Programme, INET Oxford)
Organising department: Institute for New Economic Thinking
Organiser: Susan Mousley (INET Oxford Admin Team)
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Part of: INET Oxford Researcher Seminars
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Audience: Public
Editor: Susan Mousley