Volume 25

Micro-Simulation in Action



This volume initiates a new collaboration between Research in Labor Economics (RLE) published by Elsevier Press and the Institute for the Study of Labor (IZA). Beginning 2006, the RLE series extends to two volumes per year. One volume will remain in the tradition of the series, consisting of empirical and theoretical contributions in labor economics, while the other volume will focus on specific policy questions. IZA has become one of the largest organizations of labor scholars worldwide while RLE is now a well-established publication containing labor economics research. We hope this new association will be a meaningful development for both IZA fellows and RLE readers.

The first volume of this new editorial partnership focuses on a policy-oriented research avenue concerning tax-benefit systems in Europe. The volume examines the tax-benefit micro-simulation model EUROMOD and its multiple uses. Micro-simulation models are computer-based tools used to simulate most of the direct tax and benefit instruments which affect household budget constraints. They are designed to substantially increase the level of realism in microeconomic models. Moreover, they are linked to household micro-datasets, representative of a national population, so that tax-benefit calculations can be repeated for all the sample households and aggregated. With these computations, it becomes possible to evaluate how existing tax and benefit policies alter inequality, poverty and the overall income distribution. In addition, the simulation of budget constraints and financial incentives considerably improves the econometric estimations of labor supply behavior, fertility choices and marital decisions, thereby allowing better prediction to policy changes.

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  • Volume Details
  • Editor Olivier Bargain
  • Publication date 10 November 2006
  • ISBN 978-0-76231-347-1
  • ISSN 0147-9121
  • Copyright Holder Emerald Publishing Limited
  • doi 10.1108/rlec