Examination of Inequalities in Hungary by Microsimulation in Consistency with Macro Data

Ilona Cserháti (), Tibor Keresztély () and Tibor Takacs
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Ilona Cserháti: Office of Public Administration and Justice, Department for Research Corvinus University of Budapest, Department of Statistics
Tibor Keresztély: Office of Public Administration and Justice, Department for Research Corvinus University of Budapest, Department of Statistics

Society and Economy, 2016, vol. 38, issue 4, 479-495

Abstract: Effective decision making uses various databases including both micro and macro level data-sets. In many cases it is a big challenge to ensure the consistency of the two levels. Different types of problems can occur and several methods can be used to solve them. The paper concentrates on the input alignment of the households’ income for microsimulation, which means refers to improving the elements of a micro data survey (EU-SILC) by using macro data from administrative sources. We use a combined micro-macro model called ECONS-TAX for this improvement. We also produced model projections until 2015 which is important because the official EU-SILC micro database will only be available in Hungary in the summer of 2017. The paper presents our estimations about the dynamics of income elements and the changes in income inequalities. Results show that the aligned data provides a different level of income inequality, but does not affect the direction of change from year to year. However, when we analyzed policy change, the use of aligned data caused larger differences both in income levels and in their dynamics.

Keywords: income distribution; income inequality; microsimulation; micro-macro link; well-being (search for similar items in EconPapers)
JEL-codes: C15 C54 D31 (search for similar items in EconPapers)
Date: 2016
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