Chapter 24
Microsimulation and Policy Analysis
Francesco Figari*,†; Alari Paulus†; Holly Sutherland† * University of Insubria, Varese, Italy† Institute for Social and Economic Research (ISER), University of Essex, Colchester, UK
Abstract
We provide an overview of microsimulation approaches for assessing the effects of policy on income distribution. We focus on the role of tax-benefit policies and review the concept of microsimulation and how it contributes to the analysis of income distribution in general and policy evaluation in particular. We consider the main challenges and limitations of this approach and discuss directions for future developments.
Keywords
Microsimulation models
Income distribution
Tax-benefit policies
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