Herman Deleeck Centre for Social Policy

EUROMOD

EUROMOD - Microsimulation model of tax benefit policies of the European Member States

Introduction

EUROMOD is an arithmetic microsimulation model: it simulates individual and household tax liabilities and benefit entitlements according to the policy rules in place. Its main purpose is to gain insight into the consequences of policy changes (ex-ante policy analysis) on specific households or on the income distribution but can also be used to isolate policy changes from economic and socio-demographic evolutions, for the calculation of budget constraints or to facilitate international comparisons.

EUROMOD’s most unique feature is that it is a tax-benefit model for all 27 EU Member States and the United Kingdom, running on purpose-built software. This has a number of advantages:

  • A flexible and transparent tax-benefit modelling language that is the same for all national tax benefit models
  • Cross-national comparability
  • Possibility to simulate EU wide policy reforms
  • Can act as a library of policies
  • Policy extensions or complex policy reforms are possible
  • Expert users can link to labour supply or macro-economic models

Scope

EU-28, 2005 – 2019 (some countries only available for later years).

The software

Example of EUROMOD data

 

 

 

 

 

 

 

 

Structure

EUROMOD structure input-output

 

 

 

 

 

 

 

 

 

Input data

Input data can either be microdata or hypothetical household data. In order for EUROMOD to be able to work with the data, the input data must:

  • Include compulsory variables (id, age, marital status, current education, disability, economic status, occupation, etc.)
  • Not have missing values
  • Monetary variables must be reported on (average) monthly basis
  • Follow the EUROMOD naming convention

The functionality of EUROMOD ultimately depends on the quality and information comprised in the input data.

Microdata

  • EUROMOD is specifically built for and delivers ready-to-use input data files based on EU-SILC, but also other microdata can be adapted to the EUROMOD format (e.g. HFCS, administrative data)
  • EU-SILC based data definitions are provided in the DRD
  • EUROMOD simulations on microdata show first-order effects for the population at large, when simulating a reform

Hypothetical household data

EUROMOD can also calculate net disposable incomes and income components for custom-defined hypothetical households.

  • Input data are then made by the EUROMOD add-on HHoT (Hypothetical Household Tool)
  • EUROMOD simulations on hypothetical household data are used for errorshooting, illustrative purposes, and for focusing on the generosity and interplay of policies for small subgroups of the population
  • We have ready-to-use hypothetical household indicators on the adequacy of minimum wages, social assistance and minimum income guarantee elderly (all 2009-2019): MIPI-HHoT dataset

CSB's involvement in EUROMOD

The Belgium national EUROMOD team is based at the University of Antwerp and KU Leuven. The current team members are:

  • University of Antwerp: Ella-Marie Assal, Johannes Derboven, Sarah Kuypers & Gerlinde Verbist
  • KU Leuven: André Decoster, Liebrecht De Sadeleer, Sebastiaan Maes, Zoé Rongé, Jonas Vanderkelen, Toon Vanheukelom & Stijn Van Houtven.

Resources

Please visit https://www.euromod.ac.uk/ for more information on access to the data and user training and support. You can find all country reports, working papers and other publications here as well.