Nowcasting and provisional estimates of income inequality using microsimulation techniques

The OECD Income Distribution Database (IDD) plays a leading role in providing evidence, and in monitoring and analysing international income distribution statistics to inform policy debate. In most OECD countries, official income distribution statistics are usually delivered with time lags varying from two to three years. This paper examines the growing use by statistical offices of nowcasting techniques based on microsimulation models to produce more timely provisional estimates, and examines the advantages and challenges associated with these techniques. The paper also presents provisional estimates of income inequality in 2020 for a selection of OECD countries, based on a compilation carried out by the OECD Secretariat in collaboration with Eurostat and national statistical offices. Finally, it discusses potential future developments and applications of these techniques.