A dynamic microsimulation model developed by

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SESIM

• A dynamic microsimulation model developed by
• the Swedish Ministry of Finance
• www.sesim.org

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SESIM is a . . .

• dynamic microsimulation model
• that updates a cross section of the latest
  available initial population (1999)
• with behavioral adjustment
• at an annual basis - discrete time
• using mainly estimated equations and some
  transition matrices
• using techniques for alignment and reduction of
  variance

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Structure of the SESIM model
Initial data approximately 110 000 individuals
(from 1999). 100 000 from a longitudinal database
(LINDA) and 10 000 emigrants. Variables
demographic, income, pension points from 1960.

• Mortality Different age groups, SCB and Logit
• Adoption Selection of possible families and
  assign estimated probabilities
• Migration - Immigration (Swe), - New
  immigration, - Emigration
• Fertility Separate Logit for 1, 2, 3, 4 children
• Children leave home Probabilities calculated
  based on HEK
• Cohabitation Logit for Females and different age
  groups HEK.
• Dissolution of cohabitation Logit for Females
  and different age groups.
• Disability Pension Logit for different age
  groups
• Rehabilitation from Disability Logit
• Education Sequence of models for entry and exits
• Old age Pension / retirement Benefit accrual
  model
• Unemployment Dynamic Logit
• Employment Dynamic Logit
• Labour market Sector Multinomial Logit

Status 1. Child (0-15 years old) 2. Old age
pensioner (from 61) 3. Student (16-45 years
old) 4. Disability pensioner (16-64) 5. Parental
leave (women. 16-49) 6. Unemployed (16-64 years
old) 7. Miscellaneous (16-64 years old) 8.
Employed 9. Emigrant
Income generation - Conditional on statusIncome
for employed Random effect model
Wealth and Housing Predicts Financial Wealth,
Real Wealth, Cost of Housing, Income of Capital
Rules Pension system, tax and benefit systems,
take up ratio social assistance. Public
consumption (education, care of children and
elderly, health, medicine)
Household Disposable Income
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Noncash benefits

• Private consumption of publicly provided/financed
  gods and services
• Imputed from the 1999 Income Distribution Survey
• Components
• Basic education (amount)
• Secondary education (participation amount)
• University (participation amount)
• Adult education (participation amount)
• Child care (participation amount)
• Old age care (participation amount)
• Labor market activities (participation amount)
• Health care (participation amount)
• Medication (amount)

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Average noncash benefits per ageSESIM 1999
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Composition of noncash benefitsSESIM 1999
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The current paper

• Work in progress
• Lifetime vs crossectional redistribution
• Intra- vs interpersonal redistribution
• Unit of analysis
• Individual
• Income unit
• Household
• Income concept
• Equivalent disposable income noncash benefits
  per capita
• Period
• Years 2000 2109
• Cohorts 2000 2010

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Income distribution (Gini)
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Decomposition
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DecompositionGini - contribution
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Inter vs intra personal distribution
Taxes of individual i at time t
Transfers of individual i at time t
Individual government net
Interpersonal redistribution within the cohort
Turnaround for individual i at year t
Intrapersonal redistribution within the year
Turnaround between years for individual i
Intrapersonal redistribution between years
Total redistribution within the cohort
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Inter vs intra personal distribution
Average per individual
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Taxes, transfers and non cash benefitsAverage
per age
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Noncash benefits by agequintiles of life time
income
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Taxes by agequintiles of life time income
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Transfers by agequintiles of life time income
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Individual government net by agequintiles of
life time income
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Cumulative individual government net by age,
quintiles of life time income