Simulate a Better Future: Microsimulation Analysis of Tax-Benefit Policies 2400-PL3SL326A
EUROMOD enables consistent assessment of the fiscal and distributional effects of tax and benefit policies across European countries. This is made possible by coding the systems using harmonized definitions. Initially (from the late 1990s until 2021), the model was developed by the Institute for Social and Economic Research (ISER) at the University of Essex. Since 2021, it has been maintained by the Joint Research Centre (JRC) of the European Commission and used for income analyses.
The model can be used in two ways. First, through the HHoT module, users can generate data for hypothetical households to evaluate policy scenarios by comparing budget constraints. Simulations with hypothetical households help identify unintended effects of implemented or planned tax and benefit reforms. However, this method does not allow for distributional analyses, which require data representing the population of households.
EUROMOD enables this by incorporating data from the EU Statistics on Income and Living Conditions (EU-SILC). This allows for simulation of financial work incentive indicators such as METR (marginal effective tax rate) and ATR (average tax rate), as well as indicators of poverty and income inequality. The model allows for independent reform design and assessment of its impact on the distribution of household disposable income. Example reforms include changes to tax parameters (thresholds, rates, scope and value of deductions) or changes in benefit values and eligibility criteria (e.g., changing “500+” to “800+”).
Type of course
Course coordinators
Learning outcomes
Skills:
1. The student is able to prepare a data set on the basis of unit data provided by Eurostat.
2. The student is able to describe the variables in the data set.
3. The student is able to perform a statistical descriptive analysis of variables in the database.
4. The student is able to collect and work out the literature on the selected topic.
Symbols of the Ministry of Science and Higher Education: S1A_U01, S1A_U02, S1A_U03, S1A_U04, S1A_U09
Social competence:
1. The student understands the necessity of confronting the theory with empirical data
2. The student understands the limitations resulting from imperfect data sets
3. The student knows how to work in a team, is able to plan an empirical study and jointly prepare a report presenting the results of this research
MNiSW codes: S2A_K01, S2A_K02, S2A_K03
Assessment criteria
Progress and engagement in work
Bibliography
Figari F., Paulus A., Sutherland H., Microsimulation and Policy Analysis, in A. B. Atkinson and F. Bourguignon (ed.), the Handbook of Income Distribution, Volume 2
EUROMOD Hypothetical Household Tool (HHoT) – User manual, EUROMOD Technical Note Series, December 2017
Hifkens i in., The Hypothetical Household Tool (HHoT) in EUROMOD: a new instrument for comparative research on tax-benefit policies in Europe, International Journal of Microsimulation, 2019
Baza danych z publikacjami wykorzystującymi EUROMOD.
https://euromod-web.jrc.ec.europa.eu/research/publications
Additional information
Additional information (registration calendar, class conductors, localization and schedules of classes), might be available in the USOSweb system: