Social policy development based on a combination of agent-oriented and inter-industrial approaches

T. Novikova and Alexander Tsyplakov
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T. Novikova: Institute of Economics and Industrial Engineering SB RAS, Russia

Journal of the New Economic Association, 2021, vol. 52, issue 4, 12-36

Abstract: The article proposes methodological approach for assessing the consequences of state social policy based on an extended agent-based spatial model with a detailed representation of the reaction of agents to changes in social transfers and taxation as the instruments of government policy. Optimization of territorial social policy is ensured by maximizing the iso-elastic function of social welfare (FSW), based on the individual utility functions of households and taking into account the degree of rejection of social inequality. Structural changes resulting from public policy are analyzed by aggregating the decisions of microeconomic agents and calculating the inputoutput balance table, including through a visual representation in the fourth quadrant of redistribution processes when transfers and taxes change. The results of experimental calculations show that at each level of the coefficient of rejection of inequality for both transfers and taxes, local maxima arise that correspond to the optimal levels of transfers and taxes and form monotonically decreasing iso-optimal curves depending on an increase in either the share of transfers or the level of taxation. The proposed approach to the formalization of ideas about the ratio of efficiency and fairness in the construction of FSW provides an opportunity to choose optimal solutions to justify an agent-based social policy.

Keywords: social policy; inequality; input-output balance table; agent-based modeling; social welfare function; social transfers (search for similar items in EconPapers)
JEL-codes: C33 C53 D58 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:nea:journl:y:2021:i:52:p:12-36

DOI: 10.31737/2221-2264-2021-52-4-1

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