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IZAΨMOD - IZA Policy SImulation MODel
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IZAΨMOD, short for IZA Policy SImulation MODel, is the behavioral microsimulation model of the Institute for the Study of Labor (IZA). IZAΨMOD consists of three main components. The basis is a static microsimulation model for the German tax and benefit system. The second module is an econometrically estimated labor supply model, which takes into account behavioral reactions to tax reforms. The third component is a labor demand module, which completes the analysis of the labor market and allows a global assessment of the effects of policy measures. Components one and two are based on data from the German Socio-Economic Panel (GSOEP), a representative panel study of private households in Germany, whereas the demand module uses the German linked employer-employee data set LIAB. |
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The simulation steps of IZAΨMOD can be broadly described as follows:
1. The current tax system is simulated using the modified data. IZAΨMOD computes individual tax payments for each case in the sample considering gross incomes and deductions in detail. The individual results are multiplied by the individual sample weights to extrapolate the fiscal effects of the reform with respect to the whole population. The result of this simulation is the benchmark for different reform scenarios which are also modeled using the modified database. After applying the current tax and benefit system the disposable income is computed for each household. Based on these net incomes the distributional effects of the tax system at the status quo are assessed.
2. A discrete choice household labor supply model is applied to estimate consumption/leisure preferences of each household using the calculated net incomes and information on working hours.
3. The effects of tax and benefit reforms are analyzed. The reforms will change the net incomes of the households (first-round effect), which in a second step will induce labor supply reactions following the previously estimated consumption/leisure preferences which are assumed to be fix.
4. The labor demand module is employed to estimate how the labor supply reactions translate into employment effects.
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Publications |
- Bonin, H., Kempe, W. and Schneider, H. (2003). Kombilohn oder Workfare? Zur Wirksamkeit zweier arbeitsmarktpolitischer Strategien.
IZA DP No. 587 / Quarterly Journal of Economic Research 72(1): 51-67
- Bonin, H., Kempe, W. and Schneider H. (2002). Household Labor Supply Effects of Low-Wage Subsidies in Germany.
IZA DP No. 637 / Journal of Applied Social Sciences Studies, 2003, 123 (1), 199-208
- Bonin, H., Rinne, U. and Schneider, H. (2007). Untersuchung der
beschäftigungs- und finanzpolitischen Auswirkungen des
Bofinger/Walwei-Konzepts zur Neuordnung des Niedriglohnbereichs.
IZA
Research Report No. 11
- Bonin, H. and Schneider H. (2005). Wohlfahrts- und Verteilungseffekte eines allgemeinen Freibetrags bei den Sozialabgaben.
IZA DP No. 1490 / Journal for Labour Market Research, 2005, 38 (4), 475-492
- Bonin, H. and Schneider, H. (2006). Workfare: Eine wirksame Alternative zum Kombilohn.
IZA DP No. 2399
- Bonin, H. and Schneider, H. (2007). Beschäftigungswirkungen und fiskalische Effekte einer Einführung des Solidarischen Bürgergelds.
(available online)
- Neumann, D., Peichl, A., Schneider, H. and Siegloch, S. (2009). Die Steuerreformpläne der neuen Bundesregierung und das Bürgergeld: Eine Simulation von Risiken und Nebenwirkungen.
IZA Standpunkt Nr. 21
- Peichl, A., Schneider, H. und Siegloch, S. (2010). Reform der Hinzuverdienstregeln in der Grundsicherung: Kein Entkommen aus der Transferfalle.
IZA Standpunkt Nr. 26
- Peichl, A., Pestel, N., Schneider, H. und Siegloch, S. (2010). Alter Wein in neuen Schläuchen: Der Fünf-Stufen-Steuertarif der FDP auf dem Prüfstein.
IZA Standpunkt Nr. 27
- Peichl, A. and Siegloch, S. (2010). Accounting for Labor Demand Effects in Structural Labor Supply Models.
IZA Discussion Paper No. 5350
- Schneider, H., Peichl, A., Pestel, N. und Siegloch, S. (2010). Gutachten zur Berechnung von Vorschlägen zur Neuregelung der Erwerbstätigenfreibeträge.
IZA Research Report No. 32 |
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