Discrete choice models of labour suppluy, behavioural microsimulation and the Spanish tax reform

Jose Labeaga, Xisco Oliver and Amadéo Spadaro
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Amadéo Spadaro: UIB - Universitat de les Illes Balears = Universidad de las Islas Baleares = University of the Balearic Islands, PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique

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Abstract: In this paper, we demonstrate the potential of behavioural microsimulation models as powerful tools for the ex ante evaluation of public policies. The subject of our analysis is the impact of recent Spanish Income Tax reforms on efficiency and household and social welfare. We also analyze the likely effects of some basic income - flat tax and vital minimum - flat tax schemes. The analysis is carried out using a microsimulation model in which labour supply is explicitly taken into account. Instead of following the traditional continuous approach (Hausman 1981, 1985a, and 1985b), we estimate the direct utility function using the methodology proposed by Van Soest (1995). Our data come from a sample of Spanish individuals in the 1995 wave of the EC Household Panel. We show that in the Spanish case, the redistribution policies considered have only little impact on the efficiency of the economy. On the contrary, they strongly affect social welfare.

Keywords: microsimulation models; evaluation of public policies (search for similar items in EconPapers)
Date: 2005-06
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00590836v1
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Related works:
Journal Article: Discrete choice models of labour supply, behavioural microsimulation and the Spanish tax reforms (2008)
Working Paper: Discrete choice models of labour supply, behavioural microsimulation and the Spanish tax reforms (2008)
Working Paper: Discrete choice models of labour supply, behavioural microsimulation and the Spanish tax reforms (2008)
Working Paper: Discrete choice models of labour suppluy, behavioural microsimulation and the Spanish tax reform (2005)
Working Paper: Discrete choice models of labour Supply, behavioural microsimulation and the Spanish tax reforms
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