Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/90867
Authors: 
Duncan, Alan
Stark, Graham
Year of Publication: 
2000
Series/Report no.: 
IFS Working Papers W00/11
Abstract: 
This paper introduces a recursive algorithm with which to generate complete and accurate budget constraints using static microsimulation models. We describe the generic algorithm and discuss and extension by which reasons for any change in the marginal effective tax rate may be explained. We derive continuous expressions for average tax rate (ATR), average marginal tax rate (AMTR), replacement rate (RR) and marginal effective tax rate (METR) schedules, expressed solely in terms of the marginal wage rate and 'virtual' income. A practical application serves to highlight the usefulness of this algorithm in fiscal policy analysis at micro level.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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