InGRID WS Course slides 2702014

Transcript InGRID WS Course slides 2702014

Winter School in cross country microsimulation Day 1

Silvia Avram, Alberto Tumino, Chrysa Leventi, Iva Tasseva ISER 26-28 February Course based on EUROMOD v. G1.0+ 1

Outline: Day 1

• • Morning (9:30-12:30 with a break at 11:00) – Tax Benefit Microsimulation and EUROMOD – Model Design – The EUROMOD User Interface(UI) – – – Running EUROMOD Summary Statistics Tool Error handling Documentation Afternoon (14:00-17:00 with a break at 15:30) – Hands-on practice: Exercise 1 – EUROMOD functions and parameters 2

Outline: Day 2

• • Morning (9:30-12:30 with a break at 11:00) – Hands-on practice: Exercises 2& 3 – EUROMOD Functions and Parameters (cont.) – Income Lists Afternoon (14:00-17:00 with a break at 15:30) – Hands-on practice: Exercises 4 & 5 – Hands-on practice: Exercise 6 3

Outline: Day 3

• • Morning (9:30-12:30 with a break at 11:00) – Assessment (tax) units in EUROMOD – Hands-on practice: Exercise 7 Afternoon (14:00-17:00 with a break at 15:30) – Hands-on practice: Exercises 8 & 9 – Presentations by participants – Using EUROMOD after the course – Q&A 4

Tax-benefit microsimulation and EUROMOD

Microsimulation

• Micro : technique using units (ex: individuals, households, firms etc.) instead of aggregate information • Simulation : application of an intervention that may change the state or behaviour of units • Contribution: estimates results derived from the application of these rules on each unit. 6

Tax-benefit models

• Micro : household micro-data • Simulation : taxes and benefits • Contribution: impact on disposable income 7

Why tax-benefit microsimulation?

• • Population diversity and frequency Policy complexity: detail and interactions 1 2 3 4 5 deciles 6 7 8 9 10

What makes EUROMOD special?

• Multi-country tax-benefit model for the European Union: unique • Harmonised data and simulations • Very flexible structure (but scope depends on data available) • Tax-benefit modelling language: universal • Library of policies 9

What can EUROMOD do?

• Simulate previous, current, future and “potential” tax-benefit rules – – – Distributive analysis Budgetary effects Indicators of work incentives • Complex policy reforms (e.g. revenue-neutral) • Policy swapping • Counterfactual (“what if”) scenarios (e.g. stress test) • EU-wide policy reforms • Tax evasion and non-take-up simulation/calibration (special data ) 10

Example

35% 30% 25% 20% 15% 10% 5% 0% FGT0 FGT1 FGT2 Baseline 2005 PL-2007 Austrian system French system UK system No fam ben Levy, Morawski and Myck, Euromod Working Paper 3/08 11

EUROMOD in this course

• • • • EUROMOD is continuously being developed and improved Latest public release (G1.0+) Countries and policies – BE, GR, IT, ES, UK, LT, CZ, HU, EE: 2005-2012 – – NL, SE, IE, PT, CY, PL, SI, LV, SK, FR: 2006-2012 DK, LU, FI, AT, DE, MT, RO, BG : 2007-2012 Data – – EU-SILC data acess issue training data 12

Overview of EUROMOD design

Structure

Input microdata (text file) Simulations (EURMOD Engine in C++) Policy parameters (XML files EUROMOD UI) Output microdata with additional simulated variables (text file) 14

EUROMOD input dataset

• Variables: demographic, labour, income, assets, expenditure • Harmonised data reference period • Compulsory variables (e.g., id, age, weight, incomes) • No missing values • Gross income • Monetary variables reported on (average) monthly basis • Documentation (do-files template and DRD) • Currently-based on SILC 15

Variable name convention

Names are combination of acronyms: abb** a – type of information (e.g., y: income, x: expenditure) bb – specific for each type a (e.g., y| em: employment, se: self employment) eg. yem: employment income yse: self-employment income ** further bb’s for additional information/detail eg.

ysebs: business self-employment income exception id*, eg. idperson, idmother 16

EUROMOD policy parameters

• • • • • • • Contain all info about tax-benefit rules Stored in XML files read by the EUROMOD engine Two files per country – Data config file – Parameters file Common Variables file (VarConfig.xml) Manipulated via user interface (UI) UI-stand alone software based on .NET framework Implemented via EUROMOD functions grouped in policies – General settings – Defining elements to be used later on (tax units, income lists, constants etc.) – – Simulation of policies Controlling the output file 17

EUROMOD User Interface

Installation

• • • • Requires Microsoft .NET framework files or an Internet connection to download files in the SETUP process Complete separation between UI and ‘content’ (i.e. XML) files Only one copy of the UI but can use multiple ‘content’ files ...but content files must have set structure of folders • • Run the Installation Wizard Set the path to your EUROMOD files – Project path – (if necessary) separate input data and output data paths 19

EUROMOD folder structure

Linking EUROMOD to content files

User Interface (UI)

• • • • • • Single stand-alone piece of software-Windows OS Single working environment Mostly point and click but some hot keys are available (standard and specific) In-built features that allow for improved user control and guidance Intuitive!!

Features: – Ribbon bar with tabs – – Context menus IntelliSense (suggestion of parameter values ) – – Drag and drop Bookmarks and comments – Built-in help 22

User Interface (UI)

Ribbon bar Run button Country files 23

policies open country

Working environment

policy systems 24 comments

Ribbon bar

Country tools: -country must be open to activate buttons -contains options that manipulate the general parameters of a country file -name and acronym -currencies used for parameters in the system and output -which datasets are available and their characteristics -Adding and deleting systems -Viewing options: -full spine vs. single policy -search and replace -formatting -bookmarks -More advanced (import/ export systems, add-ons etc.) 25

set exchange rate

Systems Settings

income used for head definition 26 Parameter s’ currency output currency

adding/ deleting

Database settings

characteristics of dataset to be filled in folder where micro-data stored if different from default 27

Ribbon bar

Administration tools: -adding and deleting countries -accessing and administering the variables file -updating progress: overview of available policy systems and datasets More advanced & not covered in this course: -available add-ons -applications (EXCEL based) 28

browse search

EUROMOD Help

Context menus

Context Menus

• • Activated by right-clicking – Column headings – – – Row headings Function headings/ parameter names Comments Intuitive options controlling the respective elements 31

IntelliSense

name

Variable Administration

List of all variables existing in all countries in alphabetical order Set vbl to monetary or non-monetary automatic label Description of variable for countries where it is used 33

Adding a variable

new empty row; fill in name and monetary 34

Naming a variable

35 acronyms UI checks validity of name and existence of the variable

Filtering variables

select filters 36

Running EUROMOD

select systems select countries select datasets 37

Running EUROMOD

extra options 38

Running EUROMOD

run/ error log control display of run log and error log status data and systems running run dialog 39

•

Output files

micro-data (with an optional header) • separate header file (optional) Header (optional) 40 Header Detailed run-time (optional)

Output files

• • • Content manipulated in policy output_std_cc Usually including: – All variables present in the input microdata file – Simulated variables (i.e. simulated taxes and benefits) – – Standardized income lists (optional) non-standard income lists – – (optional) temporary variables (optional) Tax unit identification info Control level at which info is outputted (ex: individual, household etc.) 41

Summary Statistics Tool

• • • • • • • Output of EUROMOD= micro-data Process using a statistical software package (ex. Stata) Only for training purposes- Summary Statistics Tool Computes a range of commonly used indicators and statistics: – poverty rates for the overall population and for selected groups and the Gini coefficient – distribution of household income, taxes and benefits by income group – demographic information on households by income group Currently in Excel Computed indicators are fixed and cannot be changed  analysis!!!

not for ‘real’ 7 tables produced in Excel 42

Summary statistics tool

enable macros folder where your output file is stored fill in required info one row per output file 43

Summary Statistics Tool

country and system on which statistics calculated 44 one sheet per output file

Implementing a simple reform

• • • Where: – Simpleland What: – make the child benefit more generous How: – Open Simpleland – Add a new system where your reform will be implemented 45

Implementing a simple reform

• How: – Open the child benefit policy – Make the changes in the new (reform) system 46 – – Run EUROMOD Analyze results with the Summary Statistics Tool

Error handling

47 produce an error

Error handling

info on nature and location of the error 48

Error handling

• • • • Output folder-error log file (text format) Same info as in the running dialog box Error logs contain time stamp of their creation Info about EUROMOD version, policy system where error occurred and dataset used 49

Documentation

• MANUALS – – – Euromod Terminology all in built-in help Running Euromod and Basic Concepts Euromod Functions • COUNTRY REPORTS (CR) (https://www.iser.essex.ac.uk/euromod/resources-for euromod-users/country-reports) • • DATA DESCRIPTION DOCUMENTS (DRD) WORKING PAPERS (https://www.iser.essex.ac.uk/euromod/working-papers) 50

Country report

Basic information – background information – brief description of all policies Simulation of taxes and benefits in EUROMOD – scope and order of simulation – detailed information on simulated policies (incl. assumptions) – Data general description and references to original data documentation – data adjustment, imputations and assumptions – Validation policy validation – income distribution validation: poverty and inequality – “health warnings” 51

End of session

Exercise 1

• Producing summary statistics 53

EUROMOD functions and parameters

EUROMOD functions

• • • Building blocks to implement policies – Parameters stored in XML and manipulated via the UI – Calculation in EUROMOD executable (C++ code) Standardised simulation language – Flexibility – Harmonisation – Parameterisation – – Consistency (e.g., errors handling) Sufficiency (any country any policy) Transparent and documented – In-built HELP – EMM_Functions manual (same info) 55

Structure of a function

Function name/ type Parameter names Switch: on/off/ toggle Parameter values Parameters are either compulsory or optional 56

Policies

• • • • • • • • = block of functions that complete a ‘real’ policy simulation can be manipulated independently – switch –affects all functions in the policy – – same policy may be repeated by simple referencing can be copied / moved order of policies is called ‘spine’ policy names end (usually) with the country acronym each policy will have some explanation on what it is intended to simulate in the comment columns policies can have any name ...but in practice we use some conventions can be: – common to all countries (ex: defining uprating factors) – country specific (ex: means-tested child benefit for single parents) 57

Policies

policy switch policy name policy description social insurance contribution policy made up of 3 functions 58

Manipulating functions and policies

59 right-click on policy name to activate menu right-click on function/ parameter names to activate menu

Type of functions

• System functions – functions used to define some general settings that are common across countries (ex: uprating, default values for datasets etc.) • Policy functions – functions used to implement tax-benefit policies • Special functions – more advanced functions that perform more complicated tasks (loops, changing parameters at run-time etc.) – not covered in this course

System functions Uprate, SetDefault,DefOutput, DefConst, DefVar

Function Uprate (I)

• Indices to uprate monetary variables to price level of policy year name of variable to be uprated value of uprating factor define factor to be used later on

Aggregate variables

Function Uprate (II)

Using different values for different groups 63

Function SetDefault

• sets alternative values or variables if a dataset variable is missing

•

Function DefOutput

Determines the content of the output file • TAX_UNIT: level of aggregation

Function DefConst

• To set up constants ... name them always starting with a $ 66

Function DefVar

• To set intermediate (temporary) variables not included in VarConfig.xml 67

Policy functions Elig, ArithOp

Function Elig

• • implements conditions sets a variable (by default

sel_s

) to 0 or 1, based on the condition in

elig_cond

. Subsequent functions use this information via parameter

who_must_be_elig

Function ArithOp

• Arithmetical calculator. The result of the parameter formula is stored as output variable 70

Parameters

• • • • • May be: – Common to several functions – Specific to one function May be: – Compulsory (i.e. error generated if not used) – Optional – Which parameters are compulsory/ optional depends on the function Order of parameters in a function is not important – (but order of functions in a policy is!!!!!!) Manipulated via context menu – Only relevant parameters for the given function are shown Drag & drop can be used 72

Parameters

Common output parameters

– – Output_var, output_add_var, result_var func_Elig  sel_s 74 – Either output_var or output_add_var must be indicated

Common “limiting” parameters

– – – Lowlim (lower limit) Uplim (upper limit) Threshold (threshold) 75

Common “eligibility” parameters (1)

– – – – – – who_must_be_elig: function’s calculations are carried out if… one_member (or one): one member of the assessment unit is eligible one_adult: one adult member of the assessment unit is eligible all_members (or all or taxunit): all members of the assessment unit are eligible all_adults: all adult members of the assessment unit are eligible nobody: calculations are carried out for each assessment unit (default) • – – “eligibility” is determined by the variable indicated by the parameter elig_var (by default sel_s)

0: person is not eligible 1: person is eligible

Common “eligibility” parameters (2)

Common “eligibility” parameters (3)

who_must_be_elig 78 1 1 1 2 2 3 4 4 11 12 13 21 22 31 41 42 80 60 40 80 6 80 40 40 1 0 0 1 0 1 0 0 1 1 1 1 1 1 0 0 1 1 1 1 1 1 0 0 0 0 0 0 0 1 0 0 0 0 0 1 1 1 0 0 1 1 1 1 1 1 1 1

Common parameter TAX_UNIT

• • TAX_UNIT allows for the definition of the assessment unit a function refers to: – – – Individuals Various definitions of family units Household units Compulsory for most policy functions 79

Linking functions

Interactions between functions (1)

– Input: one function calculates a variable, which is used as an input by a subsequent function. 81

Interactions between functions (2)

• The functions interact in three ways (+ replacement): – Condition: one function (usually function Elig) evaluates a condition and a subsequent function operates on the basis of the result of this evaluation 82

Interactions between functions (3)

– Addition: one function calculates a part of a policy and a subsequent function calculates another part of the policy and therefore needs to add to the first part. 83

Result of a function

• It is always assigned to the head of the assessment unit • For all other members of the unit and for those in not eligible units (defined by who_must_be_elig) : – output_var is set to zero.

– – output_add_var result_var not changed or set to 0 if undefined before is set to zero.

Parameter values

• •

Amount parameters

Monetary (numbers; use . for decimal) followed by their period: – – #m for monthly (no conversion) #y for yearly – – #q for quarterly #w for weekly – #d for daily – – #l for labour day #s for six day labour week Default is #m (monthly) 86

• • •

Query parameters (1)

frequently used ready made calculations The results of a query is either yes/no or some (monetary or non monetary) value.

Well-documented in Help 87

Query parameters (2)

• Use IntelliSense to enter values 88 query symbol

Formula parameters

• • Operations: ^, , , , (), !(), %, , /, *, \, +, -, Operands : – variables (monetary and non monetary), – – incomelists queries 89

Condition parameters

• • • logical and comparison operations to evaluate a condition with a yes/no result.

Conditions in by curly brackets {}, can be grouped by parenthesis () Negative condition (i.e. !) can be used with a single condition only 90

Footnote parameters

• They serve the further specification of other parameters. They are identified by #i (i=number from 1 to....) – Limits – Amounts – Assessment units – Specification of queries 91

Parameter values and the assessment unit

level of interpretation monetary variables and incomelists non-monetary variables and individual level queries non individual level queries condition parameters

assessment unit individual check manual

other parameters

assessment unit head of assessment unit check manual

End of session

Winter School in cross country microsimulation Day 2

Silvia Avram, Alberto Tumino, Chrysa Leventi, Iva Tasseva 26-28 February 2014 Course based on EUROMOD v. G1.0+ 94

Outline: Day 2

• Morning (9:30-12:30 with a break at 11:00) – Hands-on practice: Exercises 2& 3 – EUROMOD Functions and Parameters (cont.) – Income Lists • Afternoon (14:00-17:00 with a break at 15:30) – Hands-on practice: Exercises 4 & 5 – Hands-on practice: Exercise 6 95

Exercise 2

• Reforming child benefit in Estonia 96

Exercise 3

• Reforming the child benefit in the UK 97

Policy functions BenCalc, SchedCalc, Allocate

Function BenCalc (1)

• • • Benefit calculator, used to implement a wide range of policy instruments, in particular benefits It combines the functionalities of the functions func_Elig and func_ArithOp Calculates a sum of “components”, where the value of a component is only added if a certain condition is fulfilled by at least one member of the assessment unit 99

Function BenCalc (2)

• • • • compi_cond = func_Elig |elig_cond compi_perTU or compi_perElig = func_ArithOp | formula – compi_perTU amount is added once – compi_perElig amount is added once per individual fulfilling the condition is added. either perTU OR perElig in one component can set upper and lower limits for earch component – compi_lowlim – compi_uplim 100

Function BenCalc (3)

• • • • Withdraw parameters- subtract something from the calculated sum of components – – – withdraw_base: withdraw_rate: withdraw_start: what is being subtracted (ex: variable, income list) what percentage of the base is being subtracted set a minimum level of the sum of components before any subtraction begins – withdraw_end: base*rate is 0 level of the base where sum of the components Negative result automatically set to 0 Result=max(Sum of components-max(BASE-START, 0)*RATE, 0) Rate and end cannot be used simultaneously – If withdraw end is specified: • RATE=(sum of components)/(END-START) 101

Function BenCalc (4)

102

• • •

Function SchedCalc (1)

Used (mainly) for progressive taxes Tax schedule – Tax bands: bandi_upLim / bandi_lowlim – Tax rate: bandi_rate – Tax base : base Instead rates, for fixed amounts use bandi_amount

Function SchedCalc (2)

• • Joint taxation: quotient Result= ((Base/Quotient)*Tax schedule)*Quotient

Function SchedCalc (3)

• simple_prog: apply highest marginal tax rate reached by base on the whole income 105

Function Allocate (1)

• • default: result is assigned to the head of the assessment unit. Allocate reallocates amounts between members of assessment units (subject to conditions)

Function Allocate (2)

• Split the amount of a variable – share: which variable to split – – Amount to split first summed up across assessment unit members share_between: condition parameter; who are the members ‘participating’ in the split – – Default is all members of the assessment unit share_prop: in what proportion to split between the various qualifying members (i.e. those satisfying the share_between condition) – Default is sharing in equal proportions 107

Special functions

108

Special functions (advanced)

• • • • • • • • • func_AddOn_xxx (implement extended functionalities not part of the standard tax benefit calculations, such Effective Marginal Tax Rates, different budget sets) func_Loop and func_UnitLoop (repeat part (or all) of the tax-benefit calculations) func_Store and func_Restore (set a variable to the initial (or other previous) value func_ChangeParam (modify parameters during the model run) func_Totals (calculates aggregates over groups of persons/households) func_DropUnit calculations) and func_KeepUnit (drops certain persons/households from the func_ILVarOp (performs operations on variables that are part of an income list) func_RandSeed (generates random numbers) func_CallProgramme (calls another programme, e.g., Stata) 109

Incomelists

110

Incomelists

• Aggregates of several variables • Standardised output (e.g. ils_dispy) • func_DefIL : special policy (i.e. ILDef_cc) or any other policy • Once defined it is available for all subsequent functions and policies • Naming convention: prefix il_ for “normal”, ils_ for “standard” • No tax unit defined  all income lists built at the individual level • Behave like a monetary variable 111

Function DefIL (1)

112 • Components: ─ Variables ─ Pre-defined income lists ─ Fixed amounts ─ Constants • Operations: ─ +, ─ fractions can be used

Function DefIL (2)

113 • If you want to take out a component in a specific policy system replace operation with n/a

• •

Standardized income lists

Defined in every country – – – – – – – – – Built in a comparable way to facilitate cross-national analysis – ils_earns: earnings – – ils_origy: ils_pen market incomes : public pensions – – ils_bennt: ils_benmt: non-means-tested benefits means-tested benefits ils_ben: ils_tax: taxes ils_sicee: ils_sicse: ils_sicer: all benefits and public pensions employee SICs self-employed SICs employer SICs ils_sicct: ils_dispy: contributed SICs disposable income ils_bensim: ils_taxsim: simulated benefits simulated taxes 114

Incomelists – Matrix view

• Summary of income list components 115

End of session

116

Exercise 4

• Reforming the means-tested income support for families with children in compulsory education in Greece 117

Exercise 5

• Reforming the health tax in Denmark 118

Exercise 6

• Reforming the social assistance (and income tax ) in Bulgaria 119

End of session

120

Winter School in cross country microsimulation Day 3

Silvia Avram, Alberto Tumino, Chrysa Leventi, Iva Tasseva 26-28 February 2014 Course based on EUROMOD v. G1.0+ 121

Outline: Day 3

• Morning (9:30-12:30 with a break at 11:00) – Assessment (tax) units in EUROMOD – Hands-on practice: Exercise 7 • Afternoon (14:00-17:00 with a break at 15:30) – Hands-on practice: Exercises 8 & 9 – Presentations by participants – – Using EUROMOD after the course Q&A 122

Assessment (Tax) Unit

123

Assessment Unit

• • • • Unit: group of household members to be considered together Function DefTU, used at sheet TUDef_cc or anywhere Defined the first time it is used by the model (see func_UpdateTU) Name convention: tu_xxxxxx_cc defined

Types of assessment units

Parameter type: defines the composition of the tax unit • HH: all individuals of the household are in the same unit.

• IND: each individual of the household forms its own unit.

• SUBGROUP: individuals determined by parameter members form an unit. The household may be split into several units of different size. • Micro data used by EUROMOD ─ sample of households ─ all individuals in a selected household ─ if assessment unit includes individuals outside the household  cannot be reconstructed exactly Subgroup Individual Household

Some examples of assessment units

description idhh idperson idpartner idmother idfather dag Household Individual family typical family couple .

without children lone parent single two singles living together large family 6 6 6 6 6 6 3 4 5 5 2 2 3 1 1 1 1 101 102 103 104 201 202 301 302 401 501 502 601 602 603 604 605 606 102 101 0 0 202 201 0 0 0 0 0 602 601 0 0 0 0 0 0 102 102 0 0 0 301 0 0 0 606 0 602 602 602 0 0 0 101 101 0 0 0 0 0 0 0 0 0 601 601 601 0 48 45 20 15 10 70 30 28 3 1 56 55 35 6 25 22 23 A A A A A A A A A A A A A A A A A A B C D E F B A A B A B A A B C D A A A A A B A A A B A A A A A A A

• •

Head of a tax unit

The head of a tax unit is – the richest member of the unit (System Configuration: Income for Head Definition) – the oldest – the lowest idperson

ExtHeadCond:

further conditions (e.g., female)

parameter name

HeadDefInc ExtHeadCond * StopfIfNoHeadFound NoChildIfHead NoChildIfPartner

value type

variable or incomelist

compulsory / optional

optional condition optional

default value

ils_origy !{IsDepChild} yes/no yes/no yes/no optional optional optional no no no

description

variable or incomelist used for determining who is the richest person in the assessment unit, see description of parameter ExtHeadCond condition further defining the head of the assessment unit the condition is &-linked with the following hardwired head condition: {HeadDefInc>anyother:HeadDefInc} | ({HeadDefInc>=anyother:HeadDefInc} & {dag>anyother:dag}) | ({HeadDefInc>=anyother:HeadDefInc} & {dag>=anyother:dag} & {idperson

Members of a tax unit (1)

• • members usually defines relations with respect to the head of the unit possible values – Partner – Children (Own/ Loose, dependent...etc) – – Dependent parents Dependent Relatives • status of each member (i.e. Partner, OwnDepChild…) is defined by a xxxCond parameter – – PartnerCond OwnChildCond – DepChildCond – OwnDepChildCond – LooseDepChildCond – DepParentCond – DepRelativeCond

Members of a tax unit (2)

• Condition parameters and default values fully documented in Help

parameter name

members PartnerCond * DepChildCond * OwnChildCond * OwnDepChildCond * condition LooseDepChildCond * DepParentCond * DepRelativeCond * LoneParentCond *

value type compulsory / optional

categorical compulsory if type= SOUBGROUP condition condition condition condition condition condition condition optional optional optional optional optional optional optional optional

default value

n/a {head:idperson=idpartner} {0} {Default}=!{isparent}&{idpartner<=0} see ** {isownchild}&{isdepchild} {idmother=0}&{idfather=0}&{isdepchild} respectively {idparent=0}&{isdepchild} see *** {0} {isparentofdepchild}&{idpartner<=0}

description

defines which members of the household form a unit if type=SOUBGROUP syntax: status type & status type & status type ... where status type can take the values: Partner: defined by parameter PartnerCond OwnDepChild: defined by OwnDepChildCond LooseDepChild: defined by LooseDepChildCond OwnChild: defined by OwnChildCond DepParent: defined by DepParentCond DepRelative: defined by DepRelativeCond note, that the head is obviously always part of unit and (usually) relations are defined with reference to the head condition defining who is a partner condition defining who is a dependent child condition defining who is an own child condition defining who is an own dependent child condition defining who is a loose dependent child condition defining who is a dependent parent condition defining who is a dependent relative condition defining who is a lone parent * variables may be used with the prefixes “head:” or “partner:”.{Default} can be used to further define default condition (see section 14.4) ** OwnChildCond: {head:idperson=idmother}|{head:idperson=idfather}|{partner:idperson=idmother}|{partner:idperson=idfather} respectively: {head:idperson=idparent}|{partner:idperson=idparent} *** DepParentCond: {head:idmother=idperson}|{head:idfather=idperson}|{partner:idmother=idperson}|{partner:idfather=idperson} respectively: ({head:idparent=idperson}|{partner:idparent=idperson})|({idpartner>0}&({head:idparent=idpartner}|{partner:idparent=idpartner})) 129

Members of a tax unit (3)

• • head: subsequent variable refers to the head of the unit partner: subsequent variable refers to the partner of the head of the unit • {default} default setting, can be combined with further specifications

Members of a tax unit (4)

• DepChildCond : determines who is dependent children • • idperson 101 102 103 104 105 106 OwnDepChild : “a son or daughter”. See OwnChildCond LooseDepChild : “someone who is depend child but doesn’t cohabit with parent/s” idpartner 102 101 0 0 0 0 idmother 0 0 102 102 102 102 idfather 0 0 101 101 101 101 dag 44 40 21 19 17 10 IsInEducation no no no no yes yes ils_origy 2500 1200 1000 800 0 0 IsDepChild 0 0 0 0 1 1 assessment unit A A B C A A

Avoiding to split up families

parameter name value type

AssignDepChOfDependents yes/no

compulsory / optional

optional

default value

no AssignPartnerOfDependents yes/no optional no

description

if yes dependent children of dependent unit members (i.e. persons who are not head or partner of the unit) are assigned to the unit child/parent relation is identified by variables idmother, idfather respectively idparent if yes partners of dependent unit members (i.e. persons who are not head or partner of the unit) are assigned to the unit partner relation is identified by variable idpartner

Using conditions which refer to income

• If the assessment unit is bigger than the individual, the level of interpreting monetary variables or income lists must be considered carefully (using footnotes) • Queries can be used to define income conditions (e.g. GetParentIncome, GetCoupleIncome, …)

Updating assessment units

• • The tax unit is defined/ calculated the first time it is used by the model: household members are assigned to respective units once an assessment unit is first used. This assignment is not changed with subsequent uses, even if circumstances change.

• However, the reassessment of the units can be enforced by using the function UpdateTU .

Tax unit in output file

func_DefTu

Name Type

on tu_tinfajt

SUBGROUP Partner & OwnDepChild Members PartnerCond & DepParent {Default} & {IsMarried} DepChildCond {Default} & {dag<25} & {il_tinty#1<=8000#y} {Default} & {dag>65} & DepParentCond #1_level {il_tinty#1<=8000#y} tu_individual_es AssignDepChOfDependen ts yes AssignPartnerOfDepende nts yes LoneParentCond {default} & !{IsMarried} & {nDepChOfPerson > 0} 1 1 1 101 102 103 102 101 0 0 0 102 0 0 101 1 2 2 2 104 201 202 203 0 202 201 0 102 0 0 202 101 0 0 201 2 204 0 202 201 52 5,201 5,202 5,206 5,205 52 5,202 5,201 52 5,203 0 0 0 5,202 5,201 52 5,204 0 5,202 5,201 52 5,205 5,206 0 0 52 5,206 5,205 92 9,201 0 0 0 0 0 92 9,202 92 9,203 92 9,204 0 0 0 0 9,201 0 9,201 0 9,202 65 60 30 28 147 29 1,007 25 3 891 0 2 0 40 1,831 0 0 0 38 10 15 70 70 80 38 3,502 34 2,324 11 0 0 0 0 0 0 0 101 101 103 104 201 201 201 201 5,201 5,201 5,201 5,201 5,201 5,201 9,202 9,202 9,203 9,202 0 1 0 0 0 1 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 1 1 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 135

Exercise 7

• Reforming the UK Child Benefit 136

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137

Exercise 8

• Introducing a benefit cap in the UK 138

Exercise 9

• Introducing the Belgian social insurance contributions for pensioners & survival pensioners in the UK 139

Using EUROMOD after the course

Model access

• • Web http://www.iser.essex.ac.uk/research/euromod – Statistics on the distribution and decomposition of disposable income – – Country Reports Working Papers Model is freely available for non-commercial use – contact [email protected]

(incl. manuals) to obtain the link for downloading 141

Data Access conditions

Data access is subject to conditions set by the original data provider • EU-SILC UBD – – – – Access depends on being in an institution recognised by Eurostat as a “research entity”. For more info see http://epp.eurostat.ec.europa.eu/portal/page/portal/microdata/doc uments/How_to_apply_for_microdata_access.pdf

In a second stage you need to be part of a “research proposal” accepted by Eurostat that includes the use of EUROMOD When you are ready to submit the second stage proposal contact [email protected]

Allow at least 4 months for the whole process • Other data: relatively straightforward procedures 142

Responsibilities of EUROMOD hand-on users

• • • • • • Respect data access rules and conditions Acknowledge EUROMOD when it is used Submit all papers using EUROMOD for inclusion in the WP series Take responsibility for your own use of the model Tell us about bugs or errors Keep us informed about what you are working on and when you are working actively: that way we can keep you informed of relevant changes 143

• Q&A 144

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145