ESRI Discussion Paper Series No.242
Microsimulation for public policy. Experiences from the Swedish model SESIM

Anders Klevmarken
Professor emeritus of Econometrics, Department of Economics, Uppsala University

Abstract

The Earned Income Tax Credit (EITC) is the largest cash or near-cash U.S. antipoverty program. Taxpayers gain access to the EITC by having incomes below certain thresholds and by filing a tax return. For a taxpayer to receive a larger EITC available to families with children, the EITC-qualifying child must live with the taxpayer more than half the year. In this paper I will discuss the EITC and low-wage labor markets in the United States.

This paper reviews policy applications of the Swedish microsimulation model SESIM. These applications include studies of grants and loans to students, redistribution through the public sector and in particular the consequences of population ageing. The paper also discusses the structure and properties of SESIM and demonstrates how the model can be used to evaluate alternative policies.


Structure of the whole text (PDF-Format 1 File)

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  2. page1
    Abstract
  3. page2
    1. Introduction to microsimulation
  4. page3
    2. Introduction to SESIM
    1. page3
      2-1.Why SESIM was built
    2. page4
      2-2.The structure and nature of SESIM
  5. page9
    3. Policy applications of SESIM
    1. page9
      3-1.Public support to students
    2. page12
      3-2.Lifetime Redistribution through taxes, transfers and non-cash benefits
    3. page14
      3-3.Intergenerational redistribution
    4. page19
      3-4.The pension system
    5. page20
      3-5.Population ageing
  6. page42
    4. Concluding evaluation of advantages and short comings of SESIM
  7. page46
    References
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