Microsimulation as an Instrument to Evaluate Economic and Social Programmes

Joachim Merz

No 5, FFB-Discussionpaper from Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)), LEUPHANA University Lüneburg

Abstract: In recent years microsimulation models (MSMs) have been increasingly applied in quantitative analyses of the individual impacts of economic and social programme policies. The suitability of using microsimulation as an instrument to analyze main and side policy impacts at the individual level will be discussed in this paper by characterizing: the general approach and principles of the two general microsimulation approaches: static and dynamic (cross-section and lifecycle) microsimulation, the structure of MSMs with institutional regulations and behavioural response, panel data and behavioural change, deterministic and stochastic microsimulation, the 4M-strategy to combine microtheory, microdata, microestimation and microsimulation, and pinpointing applications and recent developments. To demonstrate the evaluation of economic and social programmes by microsimulation, two examples concerning a dynamic (cross-section and life-cycle) microsimulation of the German retirement pension reform and a combined static/dynamic microsimulation of the recent German tax reform with its behavioural impacts on formal and informal economic activities of private households are briefly described. Evaluating the evaluation of economic and social programmes with microsimulation models finally is followed by concluding remarks about some future developments.

Keywords: microsimulation; evaluation of economic and social-political programms (search for similar items in EconPapers)
JEL-codes: C80 C81 H20 H22 (search for similar items in EconPapers)
Pages: 40 pages
Date: 1993-07
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Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Microsimulation as an Instrument to Evaluate Economic and Social Programmes (1993)
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