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Evaluating The Quality Of Gross Incomes In SILC: Compare Them With Fiscal Data And Re-calibrate Them Using EUROMOD

Author

Listed:
  • Dieter Vandelannoote

    () (Herman Deleeck Centre for Social Policy, University of Antwerp, Sint-Jacobstraat 2, 2000 Antwerp, Belgium)

  • André Decoster

    () (Research Centre of Public Economics, KU Leuven, Naamsestraat 69, 3000 Leuven, Belgium)

  • Toon Vanheukelom

    () (Research Centre of Public Economics, KU Leuven, Naamsestraat 69, 3000 Leuven, Belgium)

  • Gerlinde Verbist

    () (Herman Deleeck Centre for Social Policy, University of Antwerp, Sint-Jacobstraat 2, 2000 Antwerp, Belgium)

Abstract

In this paper, we shed light on the quality of the gross incomes as reported in the Survey on Income and Living Conditions (SILC). This is done in three steps. First, as both net and gross incomes are reported in SILC, implicit tax rates are calculated and evaluated. In a second step, gross incomes from SILC are compared with gross incomes reported on the fiscal form for the same individuals. Finally, we make use of EUROMOD to re-calibrate SILC gross incomes in order to make them consistent with the reported net ones. We find that, on average, fiscally reported gross incomes exceed gross incomes in the SILC survey. It is not clear however whether the re-calibration method (whereby we use an iterative method to construct adjusted SILC gross incomes starting from the observed net ones) is a genuine improvement upon the reported gross income distribution.

Suggested Citation

  • Dieter Vandelannoote & André Decoster & Toon Vanheukelom & Gerlinde Verbist, 2016. "Evaluating The Quality Of Gross Incomes In SILC: Compare Them With Fiscal Data And Re-calibrate Them Using EUROMOD," International Journal of Microsimulation, International Microsimulation Association, vol. 9(3), pages 5-34.
  • Handle: RePEc:ijm:journl:v:9:y:2016:i:3:p:5-34
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    References listed on IDEAS

    as
    1. Tasseva, Iva Valentinova, 2016. "Evaluating the performance of means-tested benefits in Bulgaria," Journal of Comparative Economics, Elsevier, vol. 44(4), pages 919-935.
    2. Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2015. "Household Surveys in Crisis," Journal of Economic Perspectives, American Economic Association, pages 199-226.
    3. John M. Abowd & Martha H. Stinson, 2013. "Estimating Measurement Error in Annual Job Earnings: A Comparison of Survey and Administrative Data," The Review of Economics and Statistics, MIT Press, pages 1451-1467.
    4. Arie Kapteyn & Jelmer Y. Ypma, 2007. "Measurement Error and Misclassification: A Comparison of Survey and Administrative Data," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 513-551.
    5. Holly Sutherland & Francesco Figari, 2013. "EUROMOD: the European Union tax-benefit microsimulation model," International Journal of Microsimulation, International Microsimulation Association, vol. 1(6), pages 4-26.
    6. Herwig Immervoll & Cathal O'Donoghue, 2003. "Imputation of Gross Amounts from Net Incomes in Household Surveys. An Application using EUROMOD," Computational Economics 0302001, EconWPA.
    7. Immervoll, Herwig & O'Donoghue, Cathal, 2001. "Imputation of gross amounts from net incomes in household surveys: an application using EUROMOD," EUROMOD Working Papers EM1/01, EUROMOD at the Institute for Social and Economic Research.
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    More about this item

    Keywords

    SILC (Survey on Income and Living Conditions); IPCAL; EUROMOD; Belgium; gross and net incomes; re-calibrate; iterative method;

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • D30 - Microeconomics - - Distribution - - - General

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