Introduction section T-DYMM - Treasury DYnamic Microsimulation Model

T-DYMM - Treasury DYnamic Microsimulation Model

T-DYMM (Treasury Dynamic Microsimulation Model) is a dynamic microsimulation model developed by the Treasury Department as part of three research projects funded by the European Commission - DG Employment, Social Affairs, and Inclusion between 2009 and 20211. The model is built on a particularly rich longitudinal dataset called AD-SILC, consisting of survey information from the EU-SILC survey conducted in Italy by ISTAT, as well as longitudinal information provided by administrative archives managed by INPS. AD-SILC also includes data from Income Tax Declarations and the Cadaster, provided by the Department of Finance, and through statistical matching, additional information from the SHIW survey conducted by the Bank of Italy is incorporated.
Based on econometric estimates conducted on the AD-SILC longitudinal dataset, T-DYMM simulates life-cycle transitions such as births and deaths, marriages, choices in education, employment, and retirement. To maintain consistency with macroeconomic dynamics, certain aggregates (fertility and mortality rates, employment rates, disability rates) in T-DYMM are aligned with the official projections of the Ageing Working Group of the European Commission's Economic Policy Committee.
By modeling pension rules and fiscal regulations with a high degree of detail, T-DYMM is useful for conducting medium-to-long-term distributive analyses from an intra- and inter-generational perspective. Specifically, the model is aimed at analyzing the adequacy of the social security system in light of pension reform processes and labor market dynamics. It may also be employed for poverty analyses and, with some caveats, for sustainability analyses.
For detailed information about the characteristics of the T-DYMM model and the AD-SILC dataset, please refer to the related Working Paper2 published in the Treasury Department series in March 2023.

 

 

1 For more details about the latest of the projects, carried out in collaboration with the National Institute for Public Policy Analysis and the Giacomo Brodolini Foundation between 2019 and 2021, please see: https://www.inapp.gov.it/progetti/progetti-conclusi/mospi

 

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