Microsimulation as a tool for evaluating redistribution policies

During the last twenty years, microsimulation models have been increasingly applied in qualitative and quantitative analysis of public policies. This paper provides a discussion on microsimulation techniques and their theoretical background as a tool for the analysis of public policies with particular attention to redistribution and social policies. Basic principles in using microsimulation models and interpreting their results are analyzed, with particular emphasis on tax incidence, redistribution and poverty analysis. Social welfare analysis permitted by microsimulation techniques is also discussed. Finally, the paper points to limits of present approaches and directions for future research.microsimulation ; evaluation of public policies ; optimal taxation ; poverty and inequality

Tax-benefit revealed social preferences

This paper inverts the usual logic of applied optimal income taxation. It starts from the observed distribution of income before and after redistribution and corresponding marginal tax rates. Under a set of simplifying assumptions, it is then possible to recover the social welfare function that would make the observed marginal tax rate schedule optimal. In this framework, the issue of the optimality of an existing tax-benefit system is transformed into the issue of the shape of the social welfare function associated with that system and whether it satisfies elementary properties. This method is applied to the French redistribution system with the interesting implication that the French redistribution authority either has a rather low estimate of the labor supply elasticity or does not give positive social weights to the richest tax payers.social welfare function ; optimal income tax ; microsimulation ; optimal inverse problem

Microsimulation as a Tool for Evaluating Redistribution Policies

During the last 20 years, microsimulation models have been increasingly applied in qualitative and quantitative analysis of public policies. This paper discusses microsimulation techniques and their theoretical background as a tool for the analysis of public policies. It next analyses basic principles for using microsimulation models and interpreting their results, with emphasis on tax incidence, redistribution and poverty analysis. It then discusses social welfare analysis permitted by microsimulation techniques and points to the limits of present approaches and some directions for future developments.Keywords: Microsimulation; Evaluation of Public Policies; Redistribution; Poverty, Inequality.

Labor market time and home production: A new test for collective models of intra- household allocation

The allocation of time is a crucial decision that influences many aspects of household welfare, above all consumption, income level and home production. This paper presents a new methodology to estimate woman domestic productivity using a French time use survey, at least whenever the recursivity property for constrained utility maximization with home production applies. It provides empirical evidence not rejecting a collective model of household decision making over working time, as the sum of time spent in domestic production and market labor time. Our results show also that female domestic productivity is a relevant variable explaining intra-household distribution of resources.Collective models, home production, time- use

Non-anonymous Growth Incidence Curves, Income Mobility and Social Welfare Dominance : a theoretical framework with an application to the Global Economy

The distributional incidence of growth is generally analyzed by comparing the quantiles of the pre- and post-growth income distribution -e.g. the so-called Growth Incidence Curves. Such an approach based on an implicit re-ranking of individual incomes ignores income mobility by assuming that only post-growth income matters in social welfare. By contrast, this paper takes the view that "status quo matters" and that social welfare should logically be defined on both inital and terminal income. This leads to consider 'non-anonymous' Growth Incidence Curves that plot income growth rates against the various quantiles of the initial distribution. Dominance criteria that generalize those available for standard growth incidence curves are derived, which account for the inequality of individual income growth rates, conditional on initial income. An application to the cross-country distributional feature of global growth illustrates the analysis

Individus, familles et bien-être social

Cet article examine le problème de la comparaison entre familles de taille et composition différente dans les analyses normatives de la distribution des revenus. Sont d’abord rappelées les faiblesses logiques de la notion et de l’estimation d’échelle d’équivalence. On examine alors le critère de la « dominance généralisée » qui permet de se libérer du choix d’une échelle d’équivalence, en même temps que les limitations inhérentes à ce critère. On s’interroge enfin sur la pertinence des travaux théoriques et empiriques récents sur l’allocation intra-familiale des biens pour effectuer des comparaisons inter-familiales. On peut en effet penser que l’accent mis par ces modèles sur l’individu devrait en effet rendre inutile le passage par les échelles d’équivalence.This paper considers the problem of comparing the welfare of families with different size and composition in normative income distribution studies. We first summarize the problems linked with the concept and the measurement of equivalence scales. Then, we discuss the criterion of "generalized dominance" which permits to free the analysis from the choice of a particular equivalence scale and the limitations of that criterion. Finally, we investigate the relevance of recent theoretical and empirical work on the intra-family allocation of goods and labour in making comparisons across families. It may be thought that by focussing on individuals rather than on families these models permit to avoid using equivalence scales altogether

Guest Editorial - Macro-micro analytics: background, motivation, advantages and remaining challenges

Guest editorial special issue on CGE and microsimulation

A simple preconditioned domain decomposition method for electromagnetic scattering problems

We present a domain decomposition method (DDM) devoted to the iterative solution of time-harmonic electromagnetic scattering problems, involving large and resonant cavities. This DDM uses the electric field integral equation (EFIE) for the solution of Maxwell problems in both interior and exterior subdomains, and we propose a simple preconditioner for the global method, based on the single layer operator restricted to the fictitious interface between the two subdomains.Comment: 23 page

Inequality of Outcomes and Inequality of Opportunities in Brazil

This paper departs from John Roemer's theory of equality of opportunities. We seek to determine what part of observed outcome inequality may be attributed to differences in observed 'circumstances', including family background, and what part is due to 'personal efforts'. We use a micro-econometric technique to simulate what the distribution of outcomes would look like if 'circumstances' were the same for everybody. This technique is applied to Brazilian data from the 1996 household survey, both for earnings and for household incomes. It is shown that observed circumstances are a major source of outcome inequality in Brazil, probably more so than in other countries for which information is available. Nevertheless, the level of inequality after observed circumstances are equalized remains very high in Brazil.http://deepblue.lib.umich.edu/bitstream/2027.42/40016/3/wp630.pd

Individus, familles et bien-être social

This paper considers the problem of comparing the welfare of families with different size and composition in normative income distribution studies. We first summarize the problems linked with the concept and the measurement of equivalence scales. Then, we discuss the criterion of "generalized dominance" which permits to free the analysis from the choice of a particular equivalence scale and the limitations of that criterion. Finally, we investigate the relevance of recent theoretical and empirical work on the intra-family allocation of goods and labour in making comparisons across families. It may be thought that by focussing on individuals rather than on families these models permit to avoid using equivalence scales altogether. Cet article examine le problème de la comparaison entre familles de taille et composition différente dans les analyses normatives de la distribution des revenus. Sont d’abord rappelées les faiblesses logiques de la notion et de l’estimation d’échelle d’équivalence. On examine alors le critère de la « dominance généralisée » qui permet de se libérer du choix d’une échelle d’équivalence, en même temps que les limitations inhérentes à ce critère. On s’interroge enfin sur la pertinence des travaux théoriques et empiriques récents sur l’allocation intra-familiale des biens pour effectuer des comparaisons inter-familiales. On peut en effet penser que l’accent mis par ces modèles sur l’individu devrait en effet rendre inutile le passage par les échelles d’équivalence.