Daniela Mantovani

A Short Introduction to EUROMOD: an Integrated European Tax-Benefit Model

By the mid-1990s the potential and usefulness of microsimulation models for researching tax-benefit systems had found widespread acceptance. Nevertheless, models were not widely available for independent or academic research in all countries of the European Union (EU). Even more important, carrying out consistent comparative tax-benefit microsimulation analysis was still an apparently impossible task. The time seemed ready for a European-Union-wide tax-benefit microsimulation model. Such a model, EUROMOD, is now available. This chapter is devoted to a short introduction to EUROMOD, including the reasons why it was built, its added value compared to existing models, the trade-offs faced by its builders and lessons that have been learnt from developing such an integrated model. Moreover, it aims to provide an insight into the wide range of possible applications of EUROMOD, underlined by summarizing some indicative findings of studies, which have used the model.

An Age Perspective on Economic Well-Being and Social Protection in Nine OECD Countries

For a number of reasons, incomes vary strongly with age. The nature of this variation is of interest for a wide range of policy purposes. Since age structures differ across countries, knowledge about the incomes earned by different age groups is also necessary for understanding and interpreting international comparisons of overall inequality. This paper quantifies the economic well-being of different age groups and the extent to which they rely on incomes from public and private sources. The analysis aims at establishing how social benefits, and the taxes needed to finance them, affect income levels and income disparities across different age groups. Results are compared across nine OECD countries. Les revenus varient grandement avec l’âge pour un certain nombre de raisons. La nature de ces variations est interessante a plus d’un egard a des fins politiques. Comme la structure des âges differe d’un pays a l’autre, l’information relative aux revenus percus par les differents groupes d’âge est aussi necessaire pour comprendre et interpreter les comparaisons internationales de l’inegalite. Ce document quantifie le bien-etre economique des differents groupes d’âge et montre dans quelle mesure ces derniers dependent de revenus provenant de sources publiques et privees. L’analyse tend a etablir comment les prestations sociales, ainsi que les impots et contributions sociales devant les financer, influencent les niveaux et les disparites des revenus parmi differents groupes d’âge. Le document compare les resultats pour neuf pays de l’OCDE.

Pension Incomes in the European Union: Policy Reform Strategies in Comparative Perspective

This paper considers the effects on current pensioner incomes of reforms designed to improve the long-term sustainability of public pension systems in the European Union. We use EUROMOD to simulate a set of common illustrative reforms for four countries selected on the basis of their diverse pension systems and patterns of poverty among the elderly: Denmark, Germany, Italy and the UK. The variations in fiscal and distributive effects on the one hand suggest that different paths for reform are necessary in order to achieve common objectives across countries, and on the other provide indications of the appropriate directions for reform in each case.

Does Inequality Harm Democracy? An Empirical Investigation on the UK

This paper presents an empirical investigation about the effect of an increase in economic inequality on some aspects of the quality of a democracy. The main novelty of the paper lies in its methodology: it applies to a single country (instead of a pool of countries) - the UK - in a long run perspective. Using survey data, we select three questions and check whether an increase in inequality alters the answers to these questions, subject to other control variables. Another novelty is the use of several measures of inequality (rather than the usual GINI only) both for disentangling what happens in the different parts of the income distribution and for avoiding the dependence of the results on the choice of the indicator. The main finding is that a higher level of income inequality impacts negatively on citizens’ satisfaction with democracy and positively on their political participation.