Nuffield/EUROMOD-UK training course

Paola De Agostini and Iva Tasseva ISER, University of Essex

1-2 April 2019

Course based on EUROMOD v. I1.0+

Outline: Day 1 • Morning (9:30-13:00 with a break at 11:15)

o Tax Benefit Microsimulation and EUROMOD o Overview of EUROMOD Design o EUROMOD User Interface (UI)

Running EUROMOD Statistics Presenter tool Hands-on practice Handling Errors

o Documentation

• Afternoon (14:00-17:00 with a break at 15:30)

o EUROMOD functions and parameters o Income lists o Hands-on practice

2

Outline: Day 2 • Morning (9:00-13:00 with a break at 11:00)

o EUROMOD Functions and Parameters (cont.)

o Hands-on practice

o EUROMOD Functions and Parameters (cont.)

o Hands-on practice

• Afternoon (14:00-17:00 with a break at 15:30)

o Assessment (tax) units in EUROMOD

o Hands-on practice

o Using EUROMOD after the course

o Q&A

3

Tax-benefit microsimulation and EUROMOD

Tax-benefit microsimulation models (1)

• Two main elements

o micro-data on households (and individuals), representative of the population

o tax-benefit policy rules

• Calculations of benefit entitlements and tax liabilities

o for each household

o for the existing system and a policy reform

• Used to analyse impact of policy changes on household net incomes, the fiscal budget and work incentives

• Account for

o interactions between policies

o interactions between policies and household characteristics

o heterogeneity of household characteristics

5

Tax-benefit microsimulation models (2)

• Several types of model: “static”, “dynamic”, “behavioural”

o “static” models can incorporate elements of dynamic modelling and can be linked to behavioural models

o EUROMOD is a special static tax-benefit model

• Key data issues

o Micro-data requirements

o Policy scope driven by micro-data content

6

What are tax-benefit models used for? • Analyse the impact on household incomes of policy changes over time,

holding other things constant (decomposition: “understanding” as well as “monitoring”)

• Analyse the impact of policy changes on the distribution of target variables, rather than o on the mean, as happens using regression techniques o on individual cases, as happens using OECD-style standard family type calculations

• Weighted results can be used to calculate

o distributional impact of policy changes

o budgetary cost of policy changes

o work incentive indicators

• Added value to survey/register microdata

o information which is otherwise not (publicly) available o e.g. tax deductions, benefit eligibility, net/gross values

• More up-to-date results (as data collection and release take time)

7

What is EUROMOD? EUROMOD has all the characteristics of static tax-benefit models and more:

• EUROMOD is freely available

o household micro-data from EU-SILC, for the UK from the Family Resources Survey

• 28 EU-countries implemented using a common framework

• High flexibility and transparency

o no hard-wiring; everything is parametrised o (relatively) easy to simulate structural reforms o extensive documentation o a “community” of users

• EUROMOD-UK has broadly similar scope and functionality to

o UK government models o IFS and other independent models o (Indirect taxes)

• Any differences in results between EUROMOD-UK and other UK models due to:

o different input data o choice of technical adjustments e.g. to take-up o analytical choices

8

EUROMOD: ways it can be used

• Simulate actual, proposed or illustrative changes to tax-benefit rules

o complex reforms (e.g. revenue-neutral packages, policy swaps)

o counterfactual (“what if”) scenarios (e.g. stress test for unemployment shocks)

o design regional/national/EU-wide policy reforms

• Single country, cross-country comparative, or EU-level analysis

• Tax evasion and non-take-up simulation/calibration (special data)

• Expert users can o link to labour supply or macro models

o extend policy scope (with additional data)

9

Who uses EUROMOD?

• Academic research: public economics, quantitative social policy

• International policy organisations o European Commission policy Directorates o OECD, IMF, World Bank, UNICEF (hands-on & commissioned work)

• National governments and public institutions

o SK, MT, LT, LV, EE, EL …. o Scotland (SPICe), Welsh Government, NHS Scotland

• Civil society: EUROMOD is the engine for simplified web-based models

o SORESI – run by Austrian Ministry of Social Affairs http://soresi.sozialministerium.at/soresi/#

o Mefisto – for Flanders run by CES at KULeuven http://www.flemosi.be/easycms/mefisto

• A platform for developing non-EU models

o e.g. Africa (South Africa, Namibia, Mozambique, +4), Latin America (Ecuador, Colombia, +…), Russia, Serbia ...

10

Example: hypothetical reforms • Changing child-related elements of Universal Credit in Scotland

Source: De Agostini P. & N. Hudson (forthcoming) SPICe Birefing Notes: analysis for Scotland with EUROMOD; reintroducing family element of UC, doubling child element and removing two-child limit

12

-10

12

34

56

% c

hange

1 2 3 4 5 6 7 8 9 10 AllIncome decile group

Market income NICs Income Tax

Net Council Tax State Pensions Non Means-tested bens.

Means-tested bens. Net change

Example: actual policy changes • Decomposing the change in real net income due to policy

changes in 2011-2014 by tax-benefit policy

Source: De Agostini, Paulus & Tasseva (2016), EUROMOD Working Paper 6/16 Notes: using the Policy Effects Tool in EUROMOD

13

-5

0

5

1 2 3 4 5 6 7 8 9 10

Belgium

-5

0

5

1 2 3 4 5 6 7 8 9 10

Bulgaria

-5

0

5

1 2 3 4 5 6 7 8 9 10

Czech Republic

-5

0

5

1 2 3 4 5 6 7 8 9 10

Denmark

-5

0

5

1 2 3 4 5 6 7 8 9 10

Germany

-5

0

5

10

1 2 3 4 5 6 7 8 9 10

Estonia

-5

0

5

1 2 3 4 5 6 7 8 9 10

Ireland

-10

-5

0

5

10

15

20

1 2 3 4 5 6 7 8 9 10

Greece

-5

0

5

1 2 3 4 5 6 7 8 9 10

Spain

-10

-5

0

5

1 2 3 4 5 6 7 8 9 10

France

-5

0

5

1 2 3 4 5 6 7 8 9 10

Italy

-5

0

5

1 2 3 4 5 6 7 8 9 10

Cyprus

-5

0

5

1 2 3 4 5 6 7 8 9 10

Latvia

-5

0

5

1 2 3 4 5 6 7 8 9 10

Lithuania

-5

0

5

1 2 3 4 5 6 7 8 9 10

Luxembourg

-10

-5

0

5

1 2 3 4 5 6 7 8 9 10

Hungary

-5

0

5

1 2 3 4 5 6 7 8 9 10

Malta

-5

0

5

1 2 3 4 5 6 7 8 9 10

Netherlands

-5

0

5

1 2 3 4 5 6 7 8 9 10

Austria

-5

0

5

1 2 3 4 5 6 7 8 9 10

Poland

-10

-5

0

5

1 2 3 4 5 6 7 8 9 10

Portugal

-5

0

5

1 2 3 4 5 6 7 8 9 10

Romania

-5

0

5

10

1 2 3 4 5 6 7 8 9 10

Slovenia

-5

0

5

1 2 3 4 5 6 7 8 9 10

Slovakia

-5

0

5

1 2 3 4 5 6 7 8 9 10

Finland

-5

0

5

1 2 3 4 5 6 7 8 9 10

Sweden

-5

0

5

1 2 3 4 5 6 7 8 9 10

United Kingdom

Cha

ng

e in m

ea

n d

isp

osab

le incom

e,

%

Income decile group

public pensions non pension benefits taxes and SIC

Example: policy swaps

• Impact on household incomes of own and other countries’ child-related policies

Source: Levy et al. (2007), Journal of Social Policy Notes: households are ranked in decile groups based on their actual net income in 2003

14

Example: work incentives • Decomposing the mean Marginal Effective Tax Rate by type of policy in

2015

Source: Jara, Gasior & Makovec (2017), EUROMOD Working Paper 3/17 Notes: METRs measure the incentive to work longer hours; calculations with the Marginal Tax Rates tool in EUROMOD

15

Example: EU-wide reforms • Income Stabilisation Coefficient with and without EMU Unemployment

Insurance

Source: Jara, Sutherland & Tumino (2017), EUROMOD Working Paper 3/17 Notes: EMU-UI = European Monetary Union Unemployment Insurance benefit. ISC measures how much of the earnings loss is retained through tax-benefit policies

16

Example: Behavioural reactions • Calculating labour supply elasticities

Source: Bargain et al. (2013) Journal of Human Resources

17

0

.2

.4

.6

.8

Ow

n-w

age

ela

stic

ity

EE

05

UK

01

PL

05

SW

01

FR

01

FI9

8

PT

01

US

05

HU

05

DK

98

BE

01

GE

01

IE0

1

NL

01

IT9

8

AT

98

SP

01

GR

98

Married women

0

.2

.4

.6

.8

Ow

n-w

age

ela

stic

ity

UK

01

PT

01

PL

05

IT9

8

NL

01

FR

01

SW

01

AT

98

SP

01

US

05

HU

05

EE

05

FI9

8

GR

98

BE

01

GE

01

DK

98

IE0

1

Married men

0

.2

.4

.6

.8

Ow

n-w

age

ela

stic

ity

PT

01

NL

01

PL

05

AT

98

FR

01

HU

05

EE

05

GR

98

SW

01

US

05

GE

01

UK

01

IT9

8

DK

98

BE

01

FI9

8

SP

01

IE0

1

Single men

0

.2

.4

.6

.8

Ow

n-w

age

ela

stic

ity

PT

01

HU

05

PL

05

EE

05

FR

01

DK

98

AT

98

NL

01

GE

01

SP

01

FI9

8

SW

01

US

05

UK

01

IE0

1

GR

98

BE

01

IT9

8

Single women

Point estimate 95% confidence interval

EUROMOD in this course • EUROMOD is continuously being developed and improved

• Software version: 3.0.2

• Latest public release (I1.0+)

• Countries and policies o All 28 EU MS implemented

o UK model – policy years (systems) for 2005-2018 Universal Credit is not included in the current version of the model but will be

in the autumn release!

• Data o EU-SILC/FRS (UK) – the latest for 2015/16

o training data

o # of datasets available – depends on country

18

Overview of EUROMOD design

How does EUROMOD work?

Tax-benefit policy rules and parameters

(EUROMOD User Interface)

Input micro-data (FRS or hypothetical

households data)

Policy simulations (EUROMOD software)

Tools for analysis: Statistics Presenter (or statistical software e.g. Stata)

Output micro-data = input micro-data + additional simulated variables

20

Original micro-data (FRS for the UK)

EUROMOD input micro-data (1/2)

A. Based on survey household micro-data or administrative micro-data

o Only a set of variables from the original micro-data end up in the

EUROMOD input micro-data

those relevant for tax-benefit simulations plus some more relevant for

distributional analysis

if the user has access to both the original and EUROMOD micro-data, they can

combine the two files

B. Based on hypothetical households data

o Hypothetical Household Tool in EUROMOD generates hypothetical

households based on user-defined characteristics

o Abstracts from complexities of real data – focus on specific household

types

21

EUROMOD input micro-data (2/2) • We provide you with the EUROMOD input micro-data, so you don’t need to

prepare it yourself

• Characteristics of the EUROMOD input micro-data

o Variables: demographic, labour, income, assets, expenditure

o Compulsory variables (e.g., id, age, weight, incomes)

o Harmonised data reference period

o Gross incomes, at the individual level

o Monetary variables recoded to (average) monthly basis

o No missing values

o Special variable name convention

o Text file

• Guidelines (see EUROMOD Modelling Conventions) and documentation (see Data

Requirement Document)

22

Variable name convention • Concerns the variables defined in the EUROMOD input micro-data and used by

EUROMOD for policy simulations

• The goal is to achieve: o more intuitive variable names o harmonised variable names to allow for consistent cross-county comparisons

• Names are combination of acronyms: abb**

o a – type of information (e.g., y: income, x: expenditure) o bb – specific for each type a (e.g., y| em: employment, se: self employment), e.g.

yem: employment income yse: self-employment income

o ** further bb’s for additional information/detail, e.g. ysebs: business self-employment income

o exception id*, eg. idperson, idmother

• Acronyms and list of variables stored in a common Variables file (VarConfig.xml)

23

EUROMOD policy rules and parameters • Policy rules/parameters are:

o coded using the EUROMOD ‘language’ set of (7-8) custom functions (and associated parameters) standardised ‘microsimulation language’ allow for both flexibility (parametrisation) and harmonised approach

o stored in xml files – ‘content’ files o manipulated via the EUROMOD User Interface (UI)

• UI-stand alone software based on .NET framework

• Scope of policy simulations:

o Social/national insurance contributions o Income tax o Non-contributory benefits (means-tested or not) o Contributory unemployment benefits (approximation) o Min wage

o Additional country-specific policies

EUROMOD-UK accounts for: – benefit non-take-up of means-tested benefits using estimates by DWP and HMT – increases to the statutory retirement age

25

Policies simulated in EUROMOD-UK

• National insurance contributions

o paid by employees, self-employed and employers

• Contributory JSA

• Winter Fuel Allowance

• Child Benefit

• Personal income tax

• Tax credits (Working Tax Credit & Child Tax Credit)

• Income based JSA

• Income support

• Pension Credit

• Income based ESA

• Housing Benefit & Local Housing Allowance

• Council tax benefit/CT support

• Total benefit cap

• Minimum wage and National Living wage

EUROMOD User Interface (UI)

Installation

• Requires Microsoft .NET framework files or an Internet connection to download files in the SETUP process

• Complete separation between UI and ‘content’ (i.e. XML) files

• Only one copy of the UI but can use multiple ‘content’ files o think of working with Stata and multiple do-files, specific to different projects

• ...but content files must have set structure of folders

• Run the Installation Wizard

• Set the path to your EUROMOD files

o project path o (if necessary) separate input data and output data paths

28

EUROMOD content folder structure

Input data sets

Country parameter files

Output data sets

29

Set structure

of folders

Linking the User Interface to EUROMOD content files (1)

30

Linking the User Interface to EUROMOD content files (2)

31

User Interface (UI) • Single stand-alone piece of software

• Mostly point and click but some hot keys are available (standard and specific)

• In-built features that allow for improved user control and guidance

• Intuitive!!

• Features:

o Ribbon bar with tabs

o Context menus

o IntelliSense (suggestion of parameter values )

o Drag and drop

o Bookmarks and comments

o Built-in help

o Display customization

o …much more

• New features and capabilities added over time

32

User Interface (UI) 33

Run button

Ribbon bar

Country files

Working environment

open country

by clicking

on a flag

policy systems

comments

policies

34

Ribbon bar – country tools

Country tools: • Open country to activate buttons

• Contains options that manipulate the general parameters of a country file

o name and acronym

o available policy systems and their characteristics

o available datasets and their characteristics

• Adding and deleting systems

• Viewing options:

o search and replace

o formatting

o bookmarks

• Comparing versions

• More advanced (import/ export systems, add-ons etc.)

35

Policy system settings

exchange rate

national to euro

parameters

currency

output currency

income used for

unit head

definition

all policy

years/systems

36

Database settings

adding/

deleting

characteristics of

input dataset

all policy

years/systems

all input

datasets

37

Display: • Control display and formatting

• View full spine vs. single policy

• Conditional formatting (similar idea to EXCEL)

• Bookmarks

• Matrix view of income lists

• Visualising/ hiding key parameters

Ribbon bar - control display and formatting

38

Ribbon bar – administration tools 39

Administration tools: • Adding and deleting countries

• Accessing and administering the variables file

• Updating progress: overview of available policy systems and datasets

• Merging versions

• Administrating switches

• Administrating exchange rate and HICP series

EUROMOD Help

browse search

40

Context Menus 41

right-click on

a policy,

function or

parameter

Context Menus

• Activated by right-clicking o column headings o row headings o function headings/ parameter names o comments

• Intuitive options controlling the respective

elements

• Description available

42

IntelliSense 43

Variable Administration

44

Variable Administration

list of all variables

defined in the

variables file in

alphabetical order

name

description of variable for

countries where it is used

automatic label

variable is monetary or non-monetary

45

acronyms used for names

Adding a variable

new empty row;

fill in name and monetary

46

Naming a variable

acronyms

UI checks validity of name

and existence of the variable

47

Running EUROMOD

What does ‘running EUROMOD’ mean?

Tax-benefit policy rules and parameters

(EUROMOD User Interface)

Input micro-data (FRS or hypothetical

households data)

Policy simulations (EUROMOD software)

Tools for analysis: Statistics Presenter (or statistical software e.g. Stata)

Output micro-data = input micro-data + additional simulated variables

50

Original micro-data (FRS for the UK)

It is the act of starting the

policy simulations!

Running EUROMOD (1) 51

Run button

• Two ways of Running EUROMOD:

o by clicking on button Run EUROMOD o by clicking on a country flag and then clicking on the button Run

EUROMOD

• We can run EUROMOD (simultaneously) for:

Running EUROMOD (2)

i) one country and one or more systems

ii) several countries (and systems)

iii) all existing countries and systems and for all existing data

52

Running EUROMOD (3) 53

select countries by

clicking on flags

Running EUROMOD (4)

select systems

select input micro-data

54

Running EUROMOD (5)

select all

countries/

all systems

55

unselect all

countries/

all systems

Running EUROMOD (6)

filters

56

red colour to remind us

that filters are applied

Running EUROMOD (7) 57

Running EUROMOD (8) 58

data and

systems

running

some details about

the calculations

Running EUROMOD (9) 59

EUROMOD output micro-data (1)

• Content manipulated in policy output_std_cc o Controls level at which info is outputted (e.g. individual, family or

household)

o What variables to be included in the output

• Usually including: o All variables present in the input micro-data file

o Simulated variables (i.e. simulated taxes and benefits)

o Standardised income lists (e.g. all benefits, all taxes)

o (optional) non-standard income lists

o (optional) temporary variables

o (optional) tax/assesment unit identification info

60

EUROMOD output micro-data (2)

61

name of output file:

cc_year_std

individual-level information

variables included in the

output file

Statistics Presenter Tool

Statistics Presenter Tool (1) • Statistics Presenter Tool is a quick and easy way for analysing the output

• Tool estimates

o distributional measures of income income poverty rates for the overall population and for selected groups income inequality measured by the Gini coefficient and S80/S20, by different income concepts distribution of household income, taxes and benefits by income group demographic information on households by income group

o fiscal costs government revenues and expenditures

• Tool calculates income statistics for

o a single country and policy system o several countries/policy systems o baseline and reform scenario and calculates difference in the income indicators o a particular type of income (e.g. income taxes) if stronger focus on that income

• Results can be exported in excel table(s)

• Selection of default indicators with the possibility of new templates

63

Statistics Presenter Tool (2) 64

Statistics Presenter Tool (3) 65

folder where your output file is stored

list of all output micro-data available

in the output folder

Statistics Presenter Tool (4) 66

I have selected the 2015 output micro-

data first and the 2016 data second

67

country and system for which

results are produced

one sheet per output micro-data

file (2015 first, 2016 second)

9 tables with results

Statistics Presenter Tool (5)

export results in excel

Exercise 1

• Running EUROMOD and producing summary statistics

68

Implementing a simple reform (1)

• Where: o Simpleland

• What:

o Increase the child benefit amount from 200 to 250 per month

• How:

o Open Simpleland o Find the relevant policy o Add a new system where your reform will be implemented

• Compare impact on household incomes of the baseline and reform

o Run EUROMOD to produce output micro-data o Analyse results with the Statistics Presenter tool

69

Implementing a simple reform (2) 70

Implementing a simple reform (3) 71

The benefit is 200 per month for

each dependent child in the

family

Implementing a simple reform (4) 72

type in a reform system name

Implementing a simple reform (5) 73

reform is identical to the baseline

Implementing a simple reform (5) 74

new amount; difference compared

to baseline is highlighted

75

Implementing a simple reform (6)

produce output for both the

baseline and reform

76

Implementing a simple reform (7)

77

Implementing a simple reform (8)

78

Implementing a simple reform (9)

Handling Errors

Handling errors (1) 80

typo in the syntax

Handling errors(2) 81

Handling errors (3) 82

unique identifier for the exact place of the error in the model

location of the error

Handling errors (4) 83

search for identifier

Handling errors (5) 84

copy unique identifier from error log and paste it here

Handling errors (6) • Output folder-error log file (text format)

• Same info as in the running dialog box

• Error logs contain time stamp of their creation

• Info about EUROMOD version, policy system where error occurred

and dataset used

85

Documentation

Documentation • Manuals

o EUROMOD Terminology o Running EUROMOD and Basic Concepts o EUROMOD Functions

• Country Reports (CR)

o https://www.euromod.ac.uk/using-euromod/country-reports

• EUROMOD Modelling Conventions (EMC)

o https://www.euromod.ac.uk/publications/euromod-modelling-conventions

• Data Requirement Document (DRD)-1 per dataset

• EUROMOD Working Paper series

o https://www.euromod.ac.uk/publications/type/EUROMOD%20Working%20Paper%20Series

87

all in built-in help

Country Report

• Main document accompanying the model

• Provides information about: o tax-benefit system

o model

o underlying data

o accuracy of simulations

• The latest UK CR covers the policy systems o starting from 2015 (matching the latest

available FRS 2015/16)

o until 2018

88

Country Report cont. 1. Basic information

o background information o brief description of all policies

2. Simulation of taxes and benefits in EUROMOD

o scope and order of simulation o detailed description of simulated policies (incl. assumptions)

3. Data o general description and references to original data documentation o data adjustment, imputations and assumptions

4. Validation against external statistics o aggregate amount of income component o number of benefit recipients/tax payers o income distribution: mean/median equivalised hh net income, decile shares o Income poverty and inequality o “health warnings”

89

EUROMOD functions and parameters

EUROMOD functions

• Building blocks to implement policies o Parameters stored in XML and manipulated via the UI

o Calculation by the EUROMOD software

o ‘EUROMOD language’ flexible

harmonised

parameterised

sufficient

transparent and documented (in-built HELP)

91

Structure of a function

Function name

Switch: on / off / n/a / toggle

Parameter names

Parameter values

92

Types of function

• System functions o functions used to define some general settings

o E.g. uprating, default values for datasets, etc.

• Policy functions o functions used to implement tax-benefit policies

o E.g. define eligibility, calculate amount, etc.

• Special functions o more advanced functions that perform more complicated tasks

o E.g. loops, change parameters at run-time, etc.

o (not covered in this course)

93

Manipulating functions 94

right-click on

a function or

parameter

name to

activate

menu

Policies • Block of functions that complete a policy simulation • Can be manipulated independently

o switch – affects all functions in the policy o can be copied / moved o same policy may be repeated by simple referencing

• Policy names end (usually) with the country acronym o policies can have any name ...but in practice we use naming conventions

• The comment (comments column) explains what the policy intends to simulate

• Policies can be:

o common to all countries (e.g. defining output) o country specific (e.g. means-tested child benefit for single parents)

• Order of policies is called the ‘spine’

95

Policies cont. policy description policy switch

policy name

policy made up of 3 functions

Manipulating policies 97

right-click on

a policy to

activate

menu

98

Policy functions Elig & ArithOp

Function Elig • Used to implement conditions

• Condition is defined in parameter elig_cond

• Creates a variable which is equal to 0 or 1 (by default sel_s)

• Subsequent functions use this information via parameter who_must_be_elig

99

Function ArithOp • Arithmetical calculator

• The parameter formula contains some calculations

• The result is stored as output variable via parameter output_var

100

Parameters

Parameters (1) • Can be:

o common to several functions or specific to one function o compulsory (i.e. error generated if not used) or optional

which parameters are compulsory/optional depends on the function

• Order of parameters in a function is not important

o but order of functions in a policy is!

• Manipulated via context menu (right-click)

o only relevant parameters for the given function are shown

• Drag & drop can be used

102

Parameters (2) 103

Parameters (3) 104

function parameters refer to

Common eligibility parameters (1)

• who_must_be_elig: calculations of the function are carried out if…

o one: one member of the assessment unit is eligible

o one_adult: one adult member of the assessment unit is eligible

o all: all members of the assessment unit are eligible

o all_adults: all adult members of the assessment unit are eligible

o nobody: calculations are carried out for each assessment unit (default)

• By default eligibility is determined by the variable sel_s

(can use other variable in parameter elig_var)

o 0: person is not eligible

o 1: person is eligible

105

Common eligibility parameters (2) 106

Common eligibility parameters (3) who_must_be_elig

idhh

idpers

on

dag

sel_

s

one

one_adult

all

all_adults

nobody

1 11 80 ? ? ? ? ? ?

1 12 60 ? ? ? ? ? ?

1 13 40 ? ? ? ? ? ?

2 21 80 ? ? ? ? ? ?

2 22 6 ? ? ? ? ? ?

3 31 80 ? ? ? ? ? ?

4 41 40 ? ? ? ? ? ?

4 42 40 ? ? ? ? ? ?

107

who_must_be_elig

idhh

idpers

on

dag

sel_

s

one

one_adult

all

all_adults

nobody

1 11 80 1 ? ? ? ? ?

1 12 60 0 ? ? ? ? ?

1 13 40 0 ? ? ? ? ?

2 21 80 ? ? ? ? ? ?

2 22 6 ? ? ? ? ? ?

3 31 80 ? ? ? ? ? ?

4 41 40 ? ? ? ? ? ?

4 42 40 ? ? ? ? ? ?

Common eligibility parameters (3) 108

who_must_be_elig

idhh

idpers

on

dag

sel_

s

one

one_adult

all

all_adults

nobody

1 11 80 1 ? ? ? ? ?

1 12 60 0 ? ? ? ? ?

1 13 40 0 ? ? ? ? ?

2 21 80 1 ? ? ? ? ?

2 22 6 0 ? ? ? ? ?

3 31 80 ? ? ? ? ? ?

4 41 40 ? ? ? ? ? ?

4 42 40 ? ? ? ? ? ?

Common eligibility parameters (3) 109

who_must_be_elig

idhh

idpers

on

dag

sel_

s

one

one_adult

all

all_adults

nobody

1 11 80 1 ? ? ? ? ?

1 12 60 0 ? ? ? ? ?

1 13 40 0 ? ? ? ? ?

2 21 80 1 ? ? ? ? ?

2 22 6 0 ? ? ? ? ?

3 31 80 1 ? ? ? ? ?

4 41 40 ? ? ? ? ? ?

4 42 40 ? ? ? ? ? ?

Common eligibility parameters (3) 110

who_must_be_elig

idhh

idpers

on

dag

sel_

s

one

one_adult

all

all_adults

nobody

1 11 80 1 ? ? ? ? ?

1 12 60 0 ? ? ? ? ?

1 13 40 0 ? ? ? ? ?

2 21 80 1 ? ? ? ? ?

2 22 6 0 ? ? ? ? ?

3 31 80 1 ? ? ? ? ?

4 41 40 0 ? ? ? ? ?

4 42 40 0 ? ? ? ? ?

Common eligibility parameters (3) 111

who_must_be_elig

idhh

idpers

on

dag

sel_

s

one

one_adult

all

all_adults

nobody

1 11 80 1 1 ? ? ? ?

1 12 60 0 1 ? ? ? ?

1 13 40 0 1 ? ? ? ?

2 21 80 1 ? ? ? ? ?

2 22 6 0 ? ? ? ? ?

3 31 80 1 ? ? ? ? ?

4 41 40 0 ? ? ? ? ?

4 42 40 0 ? ? ? ? ?

Common eligibility parameters (3) 112

who_must_be_elig

idhh

idpers

on

dag

sel_

s

one

one_adult

all

all_adults

nobody

1 11 80 1 1 ? ? ? ?

1 12 60 0 1 ? ? ? ?

1 13 40 0 1 ? ? ? ?

2 21 80 1 1 ? ? ? ?

2 22 6 0 1 ? ? ? ?

3 31 80 1 ? ? ? ? ?

4 41 40 0 ? ? ? ? ?

4 42 40 0 ? ? ? ? ?

Common eligibility parameters (3) 113

who_must_be_elig

idhh

idpers

on

dag

sel_

s

one

one_adult

all

all_adults

nobody

1 11 80 1 1 ? ? ? ?

1 12 60 0 1 ? ? ? ?

1 13 40 0 1 ? ? ? ?

2 21 80 1 1 ? ? ? ?

2 22 6 0 1 ? ? ? ?

3 31 80 1 1 ? ? ? ?

4 41 40 0 ? ? ? ? ?

4 42 40 0 ? ? ? ? ?

Common eligibility parameters (3) 114

who_must_be_elig

idhh

idpers

on

dag

sel_

s

one

one_adult

all

all_adults

nobody

1 11 80 1 1 ? ? ? ?

1 12 60 0 1 ? ? ? ?

1 13 40 0 1 ? ? ? ?

2 21 80 1 1 ? ? ? ?

2 22 6 0 1 ? ? ? ?

3 31 80 1 1 ? ? ? ?

4 41 40 0 0 ? ? ? ?

4 42 40 0 0 ? ? ? ?

Common eligibility parameters (3) 115

who_must_be_elig

idhh

idpers

on

dag

sel_

s

one

one_adult

all

all_adults

nobody

1 11 80 1 1 1 ? ? ?

1 12 60 0 1 1 ? ? ?

1 13 40 0 1 1 ? ? ?

2 21 80 1 1 1 ? ? ?

2 22 6 0 1 1 ? ? ?

3 31 80 1 1 1 ? ? ?

4 41 40 0 0 0 ? ? ?

4 42 40 0 0 0 ? ? ?

Common eligibility parameters (3) 116

who_must_be_elig

idhh

idpers

on

dag

sel_

s

one

one_adult

all

all_adults

nobody

1 11 80 1 1 1 0 ? ?

1 12 60 0 1 1 0 ? ?

1 13 40 0 1 1 0 ? ?

2 21 80 1 1 1 0 ? ?

2 22 6 0 1 1 0 ? ?

3 31 80 1 1 1 1 ? ?

4 41 40 0 0 0 0 ? ?

4 42 40 0 0 0 0 ? ?

Common eligibility parameters (3) 117

who_must_be_elig

idhh

idpers

on

dag

sel_

s

one

one_adult

all

all_adults

nobody

1 11 80 1 1 1 0 0 ?

1 12 60 0 1 1 0 0 ?

1 13 40 0 1 1 0 0 ?

2 21 80 1 1 1 0 1 ?

2 22 6 0 1 1 0 1 ?

3 31 80 1 1 1 1 1 ?

4 41 40 0 0 0 0 0 ?

4 42 40 0 0 0 0 0 ?

Common eligibility parameters (3) 118

who_must_be_elig

idhh

idpers

on

dag

sel_

s

one

one_adult

all

all_adults

nobody

1 11 80 1 1 1 0 0 1

1 12 60 0 1 1 0 0 1

1 13 40 0 1 1 0 0 1

2 21 80 1 1 1 0 1 1

2 22 6 0 1 1 0 1 1

3 31 80 1 1 1 1 1 1

4 41 40 0 0 0 0 0 1

4 42 40 0 0 0 0 0 1

Common eligibility parameters (3) 119

Common output parameters • Output_var, output_add_var

• Either output_var or output_add_var must be indicated!

• Exception: func_Elig sel_s

120

Common parameter TAX_UNIT • TAX_UNIT defines the assessment unit a function refers to:

o Individual (tu_individual_xx)

o Household (tu_household_xx)

o Various definitions of family units (various names, e.g. tu_family_xx, tu_bu_xx)

• Compulsory for most policy functions!

121

Common limiting parameters

• Lowlim (lower limit)

• Uplim (upper limit)

122

Linking functions

Interactions between functions (1)

• The functions interact in three ways (+ replacement):

o Condition: one function (usually function Elig) evaluates a condition and a subsequent function operates on the basis of the result of this evaluation

124

Interactions between functions (2)

o Input: one function calculates a variable, which is used as an input by a subsequent function.

125

Interactions between functions (3) o Addition: one function calculates a part of a policy and a

subsequent function calculates another part of the policy and therefore needs to add to the first part.

126

Result of a function • It is always assigned to the head of the assessment unit

• For all other members of the unit and for those in not eligible units (defined by who_must_be_elig) :

o output_var is set to zero.

o output_add_var not changed or set to 0 if undefined before

o result_var is set to zero.

127

Exercise 2

• Reforming Child Benefit in the UK (1)

128

Incomelists

Incomelists

• Aggregates of several variables

• Standardised output (e.g. ils_dispy)

• func_DefIL : special policy (i.e. ILDef_cc) or any other policy

• Once defined it is available for all subsequent functions and policies

• Naming convention: prefix il_ for “normal”, ils_ for “standard”

• No tax unit defined all income lists built at the individual level

• Behave like a monetary variable

130

Function DefIL (1)

131

• Components:

─Variables

─Pre-defined income lists

─Fixed amounts

─Constants

•Operations:

─+, -

─fractions can be used

Function DefIL (2)

• If you want to take out a component in a specific policy system replace operation with n/a

132

Standardized income lists • Defined in every country • Built in a comparable way to facilitate cross-national analysis

o ils_earns: earnings o ils_origy: market incomes o ils_pen: public pensions o ils_bennt: non-means-tested benefits o ils_benmt: means-tested benefits o ils_ben: all benefits and public pensions o ils_tax: taxes o ils_sicee: employee SICs o ils_sicse: self-employed SICs o ils_sicer: employer SICs o ils_sicct: contributed SICs o ils_sicdy: total SICs o ils_dispy: disposable income o ils_bensim: simulated benefits o ils_taxsim: simulated taxes

133

Incomelists – Matrix view • Summary of income list components

134

Exercise 3

• Reforming Child Benefit in the UK (2)

135

End of Day 1

136

Nuffield/EUROMOD-UK training course

Day 2

Paola De Agostini and Iva Tasseva ISER, University of Essex

1-2 April 2019

Course based on EUROMOD v. I1.0+

Outline: Day 2 • Morning (9:00-13.00 with a break at 11:00)

o EUROMOD Functions and Parameters (cont.)

o Hands-on practice

o EUROMOD Functions and Parameters (cont.)

o Hands-on practice

• Afternoon (14.00-17.00 with a break at 15:30)

o Assessment (tax) units in EUROMOD

o Hands-on practice

o Using EUROMOD after the course

o Q&A

138

Policy functions BenCalc, SchedCalc, Allocate

Function BenCalc (1) • Benefit calculator, used to implement a wide range of policy instruments, in

particular benefits

• It combines the functionalities of the functions func_Elig and func_ArithOp

• Calculates a sum of “components”, where the value of a component is only added if a certain condition is fulfilled by at least one member of the assessment unit

140

Function BenCalc (2)

• comp_cond = func_Elig |elig_cond

• comp_perTU or comp_perElig = func_ArithOp | formula

o comp_perTU amount is added once

o comp_perElig amount is added once per individual fulfilling the condition is added.

• either perTU OR perElig in one component

• can set upper and lower limits for each component

o comp_lowlim

o comp_uplim

141

Function BenCalc (3) • Withdraw parameters: subtract something from the

calculated sum of components o withdraw_base: what is being subtracted (ex: variable, income

list) o withdraw_rate: what percentage of the base is being subtracted o withdraw_start: set a minimum level of the sum of components

before any subtraction begins o withdraw_end: level of the base where sum of the components-

base*rate is 0

• Negative result automatically set to 0 • Result=max(Sum of components-max(BASE-START, 0)*RATE,

0) • _Rate and _end cannot be used simultaneously

o If withdraw_end is specified: RATE=(sum of components)/(END-START)

142

Function BenCalc (4) 144

• For more examples see EUROMOD help

Function BenCalc (5)

145

146 146

Function SchedCalc (1) • Used (mainly) for progressive taxes • Tax schedule

o Tax bands: band_upLim / band_lowlim o Tax rate: band_rate o Tax base: base

• Instead of rates, for fixed amounts use band_amount

147 147

Function SchedCalc (2)

• Joint taxation: quotient

• Result= ((Base/Quotient)*Tax schedule)*Quotient

Function SchedCalc (3)

• simple_prog: apply highest marginal tax rate reached by base on the whole income

148

Function Allocate (1)

• Default: result is assigned to the head of the assessment unit

• Split the amount of a variable o share: which variable to split

Amount to split first summed up across assessment unit members

o share_between: condition parameter; who are the members ‘participating’ in the split Default is all members of the assessment unit

o share_prop: in what proportion to split between the various qualifying members (i.e. those satisfying the share_between condition) Default is sharing in equal proportions

149

150 150

Function Allocate (2)

• Allocate reallocates amounts between members of assessment units (subject to conditions)

Parameter values

Amount parameters • Monetary (numbers; use . for decimal) followed by their period:

o #m for monthly (no conversion)

o #y for yearly

o #q for quarterly

o #w for weekly

o #d for daily

o #l for labour day

o #s for six day labour week

o #c for capital (no conversion)

• Default is #m (monthly)

152

Query parameters (1) • frequently used ready made calculations

• The results of a query is either yes/no or some (monetary or non monetary) value.

• Well-documented in Help

153

Query parameters (2)

• Use IntelliSense to enter values

154

query symbol

Formula parameters • Operations: ^, <min>, <max>, <abs>, (), !(), %, /, *, \, +, -,

• Operands :

o variables (monetary and non monetary),

o Income lists

o queries

155

Condition parameters • logical and comparison operations to evaluate a condition with a yes/no result.

• Conditions in by curly brackets {}, can be grouped by parenthesis ()

• Negative condition (i.e. !) can be used with a single condition only

156

Footnote parameters • They serve the further specification of other parameters.

They are identified by #i (i=number from 1 to....) o Limits

o Amounts

o Assessment units

o Specification of queries

157

Parameter values and Assessment Unit • Assessing the result of a function

158

Exercise 4

• Introducing a benefit cap in Denmark

o Use training_data for this exercise

159

System functions Uprate, SetDefault, DefOutput,

DefVar

161

Function Uprate (I) 161

• Indices to uprate monetary variables to price level of policy year

name of

variable to

be uprated

value of

uprating factor

define factor to be

used later on

Uprating indices (I)

• Datasets -> used with more than 1 system

o May be needed for various exercises (ex: Policy Effects)

o Fewer datasets than systems

• Discrepancy between the year the dataset refers to and the policy year

• Use uprating indices to index the incomes in the dataset to the policy year (i.e. the year you want to simulate)

o Ex: index the income data referring to 2011 to the 2014 level

• Uprating indices- based on raw series

• EM calculates implicit updating factors

162

Uprating indices (II)

163

the index

name the index-

reference

(handle) ($f_)

policy years

source of

information

Uprating indices (III) 164

• You can see the implicit updating factors applied

• Select the dataset you want to view

• Example:

• Dataset BG_2010_b5 income referring to 2009

• CPI increased between 2009 & 2012 by approx. 9%

Function Uprate (I)

• Uprating Indices used by the function Uprate

165

Dataset(s) to which the

function applies

Name of income

variable to be

uprated

Reference of

index to be

used for

uprating

Function Uprate (II) 166

• Aggregate variables • Using different values for different

groups

167 167

Function SetDefault • sets alternative values or variables if a dataset variable is missing

168 168

Function DefOutput • Determines the content of the output file

• TAX_UNIT: level of aggregation

169

Function DefVar

• To set intermediate (temporary) variables not included in VarConfig.xml

169

170

Special functions

Special functions (advanced)

• AddOn_xxx (implement extended functionalities not part of the standard tax-benefit calculations, such as Effective Marginal Tax Rates, different budget sets)

• Loop and UnitLoop (repeat part (or all) of the tax-benefit calculations)

• Store and Restore (set a variable to the initial (or other previous) value

• ChangeParam (modify parameters during the model run)

• Totals (calculates aggregates over groups of persons/households)

• DropUnit and KeepUnit (drops certain persons/households from the calculations)

• ILVarOp (performs operations on variables that are part of an income list)

• RandSeed (generates random numbers)

• CallProgramme (calls another programme, e.g., Stata)

171

Exercise 5

• Reforming personal tax allowance for all and calculating devolved income tax for Wales

172

173

Assessment (Tax) Unit

174 174

Assessment Unit • Unit: group of household members to be considered together

• Function DefTU, used at policy TUDef_cc or anywhere

• Defined the first time it is used by the model (see func_UpdateTU)

• Name convention: tu_xxxxxx_cc defined

Type of assessment units • Parameter type: defines the composition of the tax unit

• HH: all individuals of the household are in the same unit.

• IND: each individual of the household forms its own unit.

• SUBGROUP: individuals determined by parameter members form an unit. The household may be split into several units of different size.

• Micro data used by EUROMOD

o sample of households

o all individuals in a selected household

o if assessment unit includes individuals outside the household cannot be reconstructed exactly

175

Individual Household Subgroup

176 176

Some examples of assessment units description idhh idperson idpartner idmother idfather dag Household Individual family

typical family 1 101 102 0 0 30 A A A

1 102 101 0 0 28 A B A

1 103 0 102 101 3 A C A

1 104 0 102 101 1 A D A

couple.without

children

2 201 202 0 0 56 A A A

2 202 201 0 0 55 A B A

lone parent 3 301 0 0 0 35 A A A

3 302 0 301 0 6 A B A

single 4 401 0 0 0 25 A A A

two singles

living together

5 501 0 0 0 22 A A A

5 502 0 0 0 23 A B B

large family 6 601 602 606 0 48 A A A

6 602 601 0 0 45 A B A

6 603 0 602 601 20 A C A

6 604 0 602 601 15 A D A

6 605 0 602 601 10 A E A

6 606 0 0 0 70 A F B

177 177

Head of a tax unit • The head of a tax unit is

o the richest member of the unit (System Configuration: Income for Head Definition)

o the oldest

o the lowest idperson

• ExtHeadCond: further conditions (e.g., female)

parameter name value type

compulsory / optional

default value description

HeadDefInc variable or incomelist

optional ils_origy variable or incomelist used for determining who is the richest person in the assessment unit, see description of parameter ExtHeadCond

ExtHeadCond * condition optional !{IsDepChild} condition further defining the head of the assessment unit the condition is &-linked with the following hardwired head condition: {HeadDefInc>anyother:HeadDefInc} | ({HeadDefInc>=anyother:HeadDefInc} & {dag>anyother:dag}) | ({HeadDefInc>=anyother:HeadDefInc} & {dag>=anyother:dag} & {idperson<anyother:idperson})

StopfIfNoHeadFound yes/no optional no yes: error is issued if ExtHeadCond rules out all household members no: no error issued, ExtHeadCond dropped for affected households

NoChildIfHead yes/no optional no if yes (possible) child status is removed if person is head

NoChildIfPartner yes/no optional no if yes (possible) child status is removed if person is partner

178 178

Members of a tax unit (1) • members usually defines relations with respect to the head of the unit

• possible values

o Partner

o Children (Own/ Loose, dependent...etc)

o Dependent parents

o Dependent relatives

• status of each member (i.e. Partner, OwnDepChild…) is defined by a xxxCond parameter

o PartnerCond

o OwnChildCond

o DepChildCond

o OwnDepChildCond

o LooseDepChildCond

o DepParentCond

o DepRelativeCond

Members of a tax unit (2) • Condition parameters and default values fully documented in

Help

179

parameter name value type

compulsory / optional

default value description

members categorical compulsory if type= SOUBGROUP

n/a defines which members of the household form a unit if type=SOUBGROUP syntax: status type & status type & status type ... where status type can take the values: - Partner: defined by parameter PartnerCond - OwnDepChild: defined by OwnDepChildCond - LooseDepChild: defined by LooseDepChildCond - OwnChild: defined by OwnChildCond - DepParent: defined by DepParentCond - DepRelative: defined by DepRelativeCond note, that the head is obviously always part of unit and (usually) relations are defined with reference to the head

PartnerCond * condition optional {head:idperson=idpartner} condition defining who is a partner

DepChildCond * condition optional {0} {Default}=!{isparent}&{idpartner<=0}

condition defining who is a dependent child

OwnChildCond * condition optional see ** condition defining who is an own child

OwnDepChildCond * condition optional {isownchild}&{isdepchild} condition defining who is an own dependent child

LooseDepChildCond *

condition optional {idmother=0}&{idfather=0}&{isdepchild} respectively {idparent=0}&{isdepchild}

condition defining who is a loose dependent child

DepParentCond * condition optional see *** condition defining who is a dependent parent

DepRelativeCond * condition optional {0} condition defining who is a dependent relative

LoneParentCond * condition optional {isparentofdepchild}&{idpartner<=0} condition defining who is a lone parent

* variables may be used with the prefixes “head:” or “partner:”.{Default} can be used to further define default condition (see section 14.4) ** OwnChildCond: {head:idperson=idmother}|{head:idperson=idfather}|{partner:idperson=idmother}|{partner:idperson=idfather} respectively: {head:idperson=idparent}|{partner:idperson=idparent}

*** DepParentCond: {head:idmother=idperson}|{head:idfather=idperson}|{partner:idmother=idperson}|{partner:idfather=idperson} respectively: ({head:idparent=idperson}|{partner:idparent=idperson})|({idpartner>0}&({head:idparent=idpartner}|{partner:idparent=idpartner}))

180 180

Members of a tax unit (3) • head: subsequent variable refers to the head of the unit

• partner: subsequent variable refers to the partner of the head of the unit

• {default} default setting, can be combined with further specifications

181 181

Members of a tax unit (4) • DepChildCond: determines who is dependent children

• OwnDepChild: “a son or daughter”. See OwnChildCond

• LooseDepChild: “someone who is depend child but doesn’t cohabit with parent/s”

idperson idpartner idmother idfather dag IsInEducation ils_origy IsDepChild assessment unit

101 102 0 0 44 no 2500 0 A

102 101 0 0 40 no 1200 0 A

103 0 102 101 21 no 1000 0 B

104 0 102 101 19 no 800 0 C

105 0 102 101 17 yes 0 1 A

106 0 102 101 10 yes 0 1 A

182 182

Avoiding to split up families

parameter name value type

compulsory / optional

default value

description

AssignDepChOfDependents yes/no optional no if yes dependent children of dependent unit members (i.e. persons who are not head or partner of the unit) are assigned to the unit child/parent relation is identified by variables idmother, idfather respectively idparent

AssignPartnerOfDependents yes/no optional no if yes partners of dependent unit members (i.e. persons who are not head or partner of the unit) are assigned to the unit partner relation is identified by variable idpartner

183 183

Using conditions which refer to income

• If the assessment unit is bigger than the individual, the level of interpreting monetary variables or income lists must be considered carefully (using footnotes)

• Queries can be used to define income conditions (e.g. GetParentIncome, GetCoupleIncome, …)

184 184

Updating assessment units • The tax unit is defined/ calculated the first time it is used by the model:

household members are assigned to respective units once an assessment unit is first used.

• This assignment is not changed with subsequent uses, even if circumstances change.

• However, the reassessment of the units can be enforced by using the function

UpdateTU.

Tax unit in output file 185

func_DefTu on

Name tu_tinfajt

Type SUBGROUP

Members Partner & OwnDepChild

& DepParent

PartnerCond {Default} & {IsMarried}

DepChildCond {Default} & {dag<25} &

{il_tinty#1<=8000#y}

DepParentCond {Default} & {dag>65} &

{il_tinty#1<=8000#y}

#1_level tu_individual_es

AssignDepChOfDependen

ts yes

AssignPartnerOfDepende

nts yes

LoneParentCond {default} & !{IsMarried} &

{nDepChOfPerson > 0}

idh

h

idp

ers

on

idp

art

ner

idm

oth

er

idfa

ther

da

g

ils_

origy

il_tin

ty

tu_

tin

fajt_he

adid

tu_

tin

fajt_is

pa

rtner

tu_

tin

fajt_is

de

pchild

tu_

tin

fajt_is

de

ppare

nt

tu_

tin

fajt_is

lone

pare

nt

1 101 102 0 0 65 0 0 101 0 0 0 0

1 102 101 0 0 60 0 0 101 1 0 0 0

1 103 0 102 101 30 0 0 103 0 0 0 0

1 104 0 102 101 28 166 147 104 0 0 0 0

2 201 202 0 0 29 1,085 1,007 201 0 0 0 0

2 202 201 0 0 25 953 891 201 1 0 0 0

2 203 0 202 201 3 0 0 201 0 1 0 0

2 204 0 202 201 2 0 0 201 0 1 0 0

52 5,201 5,202 5,206 5,205 40 1,954 1,831 5,201 0 0 0 0

52 5,202 5,201 0 0 38 0 0 5,201 1 0 0 0

52 5,203 0 5,202 5,201 10 0 0 5,201 0 1 0 0

52 5,204 0 5,202 5,201 15 0 0 5,201 0 1 0 0

52 5,205 5,206 0 0 70 0 0 5,201 0 0 1 0

52 5,206 5,205 0 0 70 0 0 5,201 0 0 1 0

92 9,201 0 0 0 80 0 0 9,202 0 0 1 0

92 9,202 0 0 9,201 38 3,740 3,502 9,202 0 0 0 1

92 9,203 0 0 9,201 34 2,483 2,324 9,203 0 0 0 0

92 9,204 0 0 9,202 11 0 0 9,202 0 1 0 0

Exercise 6

• Reforming the UK child element of Child Tax Credit by:

o narrowing its age condition

o limiting it to two children

• Produce full and partial take-up outputs

186

Using EUROMOD after the course

187

Using EUROMOD for UK analysis 1/2

• Access to FRS EUL micro-data

• Simple access and installation procedures; no special IT

requirements

• Standard EUROMOD resources for hands-on users

• EUROMOD help

• Annual Country Reports:

• Which policies are simulated and how

• Information on input data adjustments and updating factors

• Validation of baseline results against official statistics

• https://www.euromod.ac.uk/using-euromod/country-reports/

• EUROMOD software updates

Using EUROMOD for UK analysis 2/2

• Access to integrated tools which facilitate common types of

analysis including

• A standard set of output table templates

• Policy Effects tool

• Hypothetical Household tool

• EUROMOD “community” resources found online e.g.

• Working papers & Technical notes

https://www.euromod.ac.uk/publications

• Newsletter https://www.euromod.ac.uk/newsletters

Data Access conditions – other countries

Data access is subject to conditions set by the original data provider • EU-SILC UBD

o Access depends on being in an institution recognised by Eurostat as a “research entity”. For more info see http://ec.europa.eu/eurostat/documents/203647/771732/How_to_apply_for_microdata_access.pdf

o In a second stage you need to be part of a “research proposal” accepted by Eurostat that includes the use of EUROMOD

o When you are ready to submit the second stage proposal contact euromod@essex.ac.uk

o Allow at least 4 months for the whole process

• Other data: relatively straightforward procedures

190

Responsibilities of EUROMOD hand-on users

• Respect data access rules and conditions

• Acknowledge EUROMOD when it is used

• Submit all papers using EUROMOD for inclusion in the WP series

• Take responsibility for your own use of the model

• Tell us about bugs or errors

• Keep us informed about what you are working on and when you are working actively: that way we can keep you informed of relevant changes

191

•Q&A

192

The Nuffield funded project on EUROMOD-UK

193

The Nuffield-funded project’s objectives

• EUROMOD-UK is already available for all to use, and we know that, with personalised support, it can be used in policy debates.

• We want to make this available widely so as to increase the use of tax-ben modelling in policy debates

• The project will:

1. Improve EUROMOD-UK’s relevance for UK policy debates (by adding new functionality)

2. Widen access through e.g. demonstration projects, better documentation, a support group, simpler interface

3. As a case study, show how EUROMOD-UK can be used to design a Basic Income scheme

4. Suggest an agenda for “where next?” that might include web-hosting of the model, and its potential use in education

What will we actually do? (1/2)

1. Make EUROMOD-UK more relevant for policy work

A. Timeliness • Main release in early autumn, using new FRS and ready for Autumn

Budget, then updated for policy changes shortly after (NB Scotland!)

B. Improvements to model • Review income concepts (e.g. produce AHC)

• Make full use of richness of FRS

• Separate models for 4 nations of UK (and, conceivably, each region) (pooling FRS years, and recognising different policies)

• Produce UK-relevant summary output tables

• Richer options for allowing for non-take-up

• Allow policies to be modelled up to 5 years out (i.e. project population and policies using OBR forecasts and assumptions)

What will we actually do? (2/2) 2. Widen access A. Training, documentation and support

• Develop training course for non-academic users of EUROMOD-UK • Produce documentation and user guides (based on existing EUROMOD country

report for the UK) • Consider how to get users to help each other

B. Simplified user interfaces (UI) • Consult on and construct a simplified UI • Consult on, and experiment with, building bespoke user interfaces

C. Case study: a basic income scheme in the UK

• Contribute to debate on basic income • Show need for, and potential of, tax-ben models • Create demand amongst BI proponents • a learning device (demonstrating how to make complex & interacting reforms do

what the user intends)

Key deliverables

1. Four model releases: two main versions, each updated after autumn/winter fiscal events

Oct 2019: FRS 2017/8 with policies to 2020/21. Will include: revised income concepts; UK, Scot and Wales; standard output tables

Oct 2020: FRS 2018/9 with policies to 2021/22 and 2025/26. Will include: as above plus: non-take-up options; NI and England

2. Documentation/user guide/validation documents for all model developments (as required)

3. Simplified interface (2020Q1) and customised interfaces (2021Q1)

4. Workshop on Basic Income, with all options modelled in EUROMOD-UK (2021Q1)

5. Final report, including future agenda (mostly for Nuffield) (2021Q3)

Thank You!!

euromod@essex.ac.uk

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