Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/71494 
Year of Publication: 
2001
Series/Report no.: 
IFS Working Papers No. 01/24
Publisher: 
Institute for Fiscal Studies (IFS), London
Abstract: 
This paper extends behavioural microsimulation modelling so that third round effects of a policy change can be simulated. The first round effects relate to fixed hours of work, while second round effects allow for changes in desired hours of work at unchanged wages. These allow for endogenous changes to the distribution of wage rates resulting from the labour supply responses to tax changes. This is achieved using the concept of an aggregate ѳupply response scheduleҬ which identifies the extent to which average labour supply responds to a proportional change in wage rates. The third round effect is obtained after re-running a microsimulation model with a suitable modification to individuals' wage rates. The method is illustrated using the MITTS behavioural microsimulation model.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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