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The use of hypothetical household data for policy learning – EUROMOD HHoT baseline indicators

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  • Gasior, Katrin
  • Recchia, Pasquale

Abstract

Tax-benefit microsimulation models are typically used to assess the impact of policy changes on the income distribution based on micro data representative of the population. Such analysis assesses the effects of tax-benefit policies by considering their interaction effects and the population structure, which are both important elements for an overall assessment of complex realities. However, it can be helpful to abstract from this complexity and to explain the effects of tax-benefit policies using concrete examples. Using hypothetical households visualises how single policies are linked with each other while leaving the additional complexity of the population structure aside. This paper uses the Hypothetical Household Tool (HHoT) to generate hypothetical household data that can be used in EUROMOD, the tax and benefit microsimulation model of the European Union, to analyse current tax and benefit policies as well as the effects of policy changes in a comparative manner. The paper provides a brief introduction of the use of hypothetical data in general and presents concrete examples of its application. The main part proposes a set of basic indicators that can be used to learn about European tax-benefit systems in a comparative perspective.

Suggested Citation

  • Gasior, Katrin & Recchia, Pasquale, 2018. "The use of hypothetical household data for policy learning – EUROMOD HHoT baseline indicators," EUROMOD Working Papers EM6/18, EUROMOD at the Institute for Social and Economic Research.
    • Handle: RePEc:ese:emodwp:em6-18
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    References listed on IDEAS

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    1. H. Xavier Jara & Alberto Tumino, 2013. "Tax-benefit systems, income distribution and work incentives in the European Union," International Journal of Microsimulation, International Microsimulation Association, vol. 1(6), pages 27-62.
    2. Holly Sutherland & Francesco Figari, 2013. "EUROMOD: the European Union tax-benefit microsimulation model," International Journal of Microsimulation, International Microsimulation Association, vol. 1(6), pages 4-26.
    3. Jekaterina Navicke & Romas Lazutka, 2016. "Work incentives across the income distribution and for model families in Lithuania: 2005-2013," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 16(2), pages 175-191.
    4. Herwig Immervoll & Pascal Marianna & Marco Mira d'Ercole, 2004. "Benefit Coverage Rates and Household Typologies: Scope and Limitations of Tax-Benefit Indicators," OECD Social, Employment and Migration Working Papers 20, OECD Publishing.
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    Cited by:

    1. Tine Hufkens & Tim Goedemé & Katrin Gasior & Chrysa Leventi & Kostas Manios & Olga Rastrigina & Pasquale Recchia & Holly Sutherland & Natascha Van Mechelen & Gerlinde Verbist, 2019. "The Hypothetical Household Tool (HHoT) in EUROMOD: a new instrument for comparative research on tax-benefit policies in Europe," International Journal of Microsimulation, International Microsimulation Association, vol. 12(3), pages 68-85.
    2. H. Xavier Jara & Katrin Gasior & Mattia Makovec, 2020. "Work Incentives at the Extensive and Intensive Margin in Europe: The Role of Taxes, Benefits and Population Characteristics," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(2), pages 705-778, November.
    3. Vincent Vergnat, 2021. "Tax-benefit policies to fight poverty among young adults in Europe," LISER Working Paper Series 2021-09, Luxembourg Institute of Socio-Economic Research (LISER).

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