A generative model for age and income distribution
University College London, Gower Street, WC1E 6BT, London, UK
2 The Old Schools, University of Cambridge, Trinity Ln, CB2 1TN, Cambridge, UK
Accepted: 12 January 2022
Published online: 29 January 2022
Each individual in society experiences an evolution of their income during their lifetime. Macroscopically, this dynamic creates a statistical relationship between age and income for each society. In this study, we investigate income distribution and its relationship with age and identify a stable joint distribution function for age and income within the United Kingdom and the United States. We demonstrate a flexible calibration methodology using panel and population surveys and capture the characteristic differences between the UK and the US populations. The model here presented can be utilised for forecasting income and planning pensions.
Key words: Income dynamics / Agent based model / Pension system
© The Author(s) 2022
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