Changes in the Income Distribution of the Dutch Elderly between 1989 and 2020: A Dynamic Microsimulation

Dutch elderly using a microsimulation model. Microsimulation models allow for detailed estimates of the income distribution. Our model deviates from traditional models by explicitly considering the persistency and heteroskedasticity of real income shocks. In this way, modeling all underlying processes influencing household income becomes less necessary, which can improve the trade-off between refinement and tractability of microsimulation models. We show the results of three model specifications with different levels of refinement.