An International Comparison of Lifetime Inequality: How Continental Europe Resembles North America

Bowlus, Audra J.; Robin, Jean‐Marc

doi:10.1111/j.1542-4774.2012.01088.x

Cited by 36 publications

(50 citation statements)

References 40 publications

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“…Studies of earnings inequality increasingly compare outcomes not in a cross-section, but over the life-cycle (e.g., Bowlus and Robin 2012). Adopting such a life-cycle perspective is also important for assessing the effects of tax-benefit systems (e.g., Nelissen 1998).…”

Section: Introductionmentioning

confidence: 99%

Life-Cycle Incidence of Family Policy Measures in Germany: Evidence from a Dynamic Microsimulation Model

2015

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. AbstractThis paper quantifies the life-cycle incidence of key family policy measures in Germany. The analysis is based on a novel dynamic microsimulation model that combines simulated family life-cycles for a base population from the 2009 wave of the German Socio-Economic Panel (SOEP) with a comprehensive tax-benefit model. The results indicate that households in Germany benefit considerably from family-and marriage-related transfers, yet also reveal substantial variation behind the population average. Moreover, it is shown that some measures, such as income tax splitting, may make individuals in fact worse off, in financial terms, over the long course, as a result of negative labour supply incentives which are reinforced through detrimental effects on human capital accumulation. IntroductionStudies of earnings inequality increasingly compare outcomes not in a cross-section, but over the life-cycle (e.g., Bowlus and Robin 2012). Adopting such a life-cycle perspective is also important for assessing the effects of tax-benefit systems (e.g., Nelissen 1998). However, the analysis is made difficult by the fact that available data sets rarely span the entire lifecycle of individuals or households. Researchers have dealt with this challenge in two ways:one possibility is to adopt a "slicing" approach which stiches agents observed at different ages together, with the extreme case of converting a single cross-section into a synthetic cohort, as in the computation of total fertility rates. The second possibility is to rely on simulation meth- In the following, we will present the different components of the model in greater detail.We will also show results from a baseline simulation that constitutes the point of departure for the policy analysis in the next section. Base populationOur base population is drawn from the SOEP wave of 2009. The SOEP is a longitudinal survey of private households, with a rich set of information on personal and household characteristics. 1 We keep only those agents for whom all information required for simulating taxes and transfers (cf. Section 3) is available.ZEWDMM is able to simulate trajectories for the entire cross-section. However, for the present purpose, we focus on households in which at least one individual is between 25 and 29 years old in 2009. The members of this group are (1) old enough so that most individuals have completed their education and at the same time (2) young enough so that we can follow them over the major part ...

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Section: Introductionmentioning

confidence: 99%

Life-Cycle Incidence of Family Policy Measures in Germany: Evidence from a Dynamic Microsimulation Model

2015

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“…However, it does not place individuals precisely within these quartiles. One approach is to deal with this is to match simulated individuals to real-world individuals who made the same employment and income quintile transitions as they did and use these individuals' new ranks to determine the simulated individual's new locations (the approach adopted by Bowlus and Robin, 2012). We adopt an alternative parametric method.…”

Section: Determine the Individual's Precise Earnings Rankmentioning

confidence: 99%

“…To allow flexibly for these aspects of mobility, we adopt the approach of estimating transition matrices across earnings quantiles and part-time or full-time employment (for other examples see Buchinsky and Hunt, 1999;Bowlus and Robin, 2012). In particular, we proceed using the following three-step parametric approach.…”

Section: Modelling Employment and Earningsmentioning

confidence: 99%

Mobility and the lifetime distributional impact of tax and transfer reforms

Roantree¹,

Shaw²,

Levell³

2016

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“…If an individual was too ill or busy for a full interview, some information may have been collected through a telephone interview or by consulting a proxy (such as a partner or adult child). 3 Splicing approach 3. 1 Overview of approach…”

Section: Datamentioning

confidence: 99%

Constructing full adult life-cycles from short panels

Levell¹,

Shaw²

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Terms of use: Documents in Constructing full adult life-cycles from short panels IFS Working Paper W15/01 Peter Levell Jonathan ShawThe Institute for Fiscal Studies (IFS) is an independent research institute whose remit is to carry out rigorous economic research into public policy and to disseminate the findings of this research. IFS receives generous support from the Economic and Social Research Council, in particular via the ESRC Centre for the Microeconomic Analysis of Public Policy (CPP).The authors gratefully acknowledge a grant from the Nuffield Foundation (OPD/40976). The Nuffield Foundation is an endowed charitable trust that aims to improve social well-being in the widest sense. It funds research and innovation in education and social policy and also works to build capacity in education, science and social science research. More information is available at http://www.nuffieldfoundation.org. AbstractIn this paper we discuss two alternative approaches to constructing complete adult life-cycles using data from an 18-year panel. The rst of these is a splicing approach -closely related to imputation -that involves stitching together individuals observed at dierent ages. The second is a microsimulation approach that uses panel data to estimate transition probabilities between dierent states at adjacent ages and then simulates a large number of individuals with dierent initial values. Our aim throughout is to construct life-cycle proles of employment, earnings and family circumstances that are representative of UK individuals born between 1945 and 1954. On balance, we nd the microsimulation approach is to be preferred because it allows us to correct for observable dierences across cohorts, and it is more amenable to counterfactual modelling.

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An International Comparison of Lifetime Inequality: How Continental Europe Resembles North America

Cited by 36 publications

References 40 publications

Life-Cycle Incidence of Family Policy Measures in Germany: Evidence from a Dynamic Microsimulation Model

Life-Cycle Incidence of Family Policy Measures in Germany: Evidence from a Dynamic Microsimulation Model

Mobility and the lifetime distributional impact of tax and transfer reforms

Constructing full adult life-cycles from short panels

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