Using Microsimulation to Optimize an Income Transfer System Towards Poverty Reduction

In this study, a static microsimulation model SOMA is used to optimize Finland's tax-benefit legislation to alleviate poverty or at least to reduce it significantly. The method is a classical optimization method using a greed optimization strategy. This means an iterative process, where only one poverty diminishing parameter is changed by 10% from its earlier value at each iteration. Expenses are also optimized to reduce inequality as measured by the Gini-coefficient. Revenues and expenses are balanced at every iteration. Certain parameters of social assistance were found to be the most effective in reducing poverty. However by raising substantially the basic unemployment benefit, basic pensions, housing benefits and study grants - leaving social assistance untouched - poverty was reduced by under 50 percent. This means that social assistance is still required to reduce poverty further. Costs are most effectively financed by raising capital income tax.Inequality, Optimization, Poverty, Public Policy, Simulation Methodology, Tax-Benefit System

Rethinking the measures of poverty

This study attempts to introduce a new method to measure relative income poverty. The aim is to find a solution which will combine information both on the depth of poverty and the quantity of the poor, i.e. the number of people living in poverty. Furthermore, a yardstick is sought which would be relatively simple and easy to understand, as these properties would facilitate the use of the new method in sociological poverty research and political decision making. The paper begins by discussing the most common problems in measuring social exclusion and relative income poverty. The following sections focus on poverty alleviation policies and poverty measurement practices, as well as on different poverty indices and the properties of an ideal poverty measure. Next, our innovation is presented, the cumulative poverty index (CUPI), together with a section discussing the estimations of the new index. The properties of the CUPI are analysed by comparing it to a number of commonly used poverty and inequality measures. Before introducing conclusions, poverty trends are compared and simulations calculated to test the CUPI against the most common relative income poverty measures

Hyvinvointipalveluista saatavan hyödyn määrä ja kohde

Tutkimuksessa selvitetään keskeisimpien julkisten hyvinvointipalveluiden kohdentumista eri tuloluokille. Tutkimus hyödyntää 13 kunnasta yhden vuoden ajalta kerättyä kattavaa hyvinvointipalvelujen käytön yksilötasoista rekisteriaineistoa. Palvelujen arvottaminen perustuu valtakunnalliseen yksikkökustannushintaan. Tulosten mukaan useimmat palvelut kohdentuvat pienituloisimpia suosivasti. Erityisesti iäkkäiden terveys- ja vanhustenhuoltopalvelut kohdistuvat hyvin voimakkaasti alimpiin tulodesiileihin. Tutkimusmenetelmästä johtuen tuloerojen pienenemistä ei kuitenkaan pystytty toteamaan yleisesti käytetyillä indikaattoreilla