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Microsimulation as a tool for evaluating redistribution policies

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  • François Bourguignon

    (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris, The World Bank - The World Bank)

  • Amadéo Spadaro

    (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris, Universitat de les Illes Balears - Universitat de les Illes Balears)

Abstract

During the last twenty years, microsimulation models have been increasingly applied in qualitative and quantitative analysis of public policies. This paper provides a discussion on microsimulation techniques and their theoretical background as a tool for the analysis of public policies with particular attention to redistribution and social policies. Basic principles in using microsimulation models and interpreting their results are analyzed, with particular emphasis on tax incidence, redistribution and poverty analysis. Social welfare analysis permitted by microsimulation techniques is also discussed. Finally, the paper points to limits of present approaches and directions for future research.

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Paper provided by HAL in its series PSE Working Papers with number halshs-00590863.

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Date of creation: Jan 2005
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Handle: RePEc:hal:psewpa:halshs-00590863

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Keywords: microsimulation ; evaluation of public policies ; optimal taxation ; poverty and inequality;

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