Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/197572 
Year of Publication: 
2018
Series/Report no.: 
EUROMOD Working Paper No. EM6/18
Publisher: 
University of Essex, Institute for Social and Economic Research (ISER), Colchester
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.
Subjects: 
hypothetical households
European Union
microsimulation
social policy
JEL: 
D04
H24
H31
I38
J38
Document Type: 
Working Paper

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