CAPP_DYN: A Dynamic Microsimulation Model for the Italian Social Security System

Abstract

Microsimulation allows to apply a set of deterministic or stochastic rules on a sample of micro-unit such as individuals, households, .rms or institutions. A Dynamic Microsimulation Model (DMM) contains a set of rules aiming at projecting the likely socio-economic evolution of a representative sample of individuals throughout time. In this paper, we describe the simulation algorithms and the econom(etr)ic frameworks used in CAPP DYN, a population based DMM for the analysis of the inter- and intra-generational redistributive e.ects of the Italian social security system. By including detailed rules that determine the eligibility to various social security bene.ts, CAPP DYN is quali.ed as a useful tool in assessing the long-run distributional e.ects of the reforms approved in the Italian social security system.Dynamic Microsimulation; Pensions; Long-term care