Introduction sectionT-DYMM - Treasury Dynamic Microsimulation Model

T-DYMM - Treasury Dynamic Microsimulation Model

The Department of the Treasury, jointly with the Fondazione Giacomo Brodolini, received a grant from the European Commission- DG Employment and Social Affairs as a result of the open call for proposals VP/2009/006 entitled "Actions related to the development of administrative datasets and models for labor market and pension analysis". The 24-month project, which started in November 2009, analyzed the behavior of older workers in the labor market with respect to policy variables such as tax policy and pension rules.
The project provided useful instruments to support policy makers in their decision-making process and improve the effectiveness of public policy evaluation in the field of labor market analysis, social security programs and individual retirement behavior.

The project was based on two main activities:

  • the development of an innovative database through the matching of administrative data from INPS (National Social Security Institute) and archival data from ISTAT (the Italian Statistics Agency), in particular, the Italian section of the EU-SILC (European Union Statistics on Income and Living Conditions) survey;
  • the development of a dynamic micro-simulation model (T-DYMM) for the analysis of the Italian labor market and pensions system, in particular regard to the adequacy of pension benefits and their related distributional aspects.

The instruments developed have provided practical support to policymakers in their efforts to reach the targets fixed by the European agenda, whose common objectives in the field of social welfare systems, are to provide adequate and sustainable pensions while ensuring: (a) adequate retirement incomes for all; (b) the financial sustainability of public and private pension schemes, bearing in mind public finance constraints and the ageing of the population; (c) the transparency of pension systems and their adaptation to individual needs and aspirations, in light of social and structural changes.

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