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Policy analysis through microsimulation: the STATS model.

B Wixon1, B Bridges, D Pattison

  • 1Division of Economic Research, Social Security Administration.

Social Security Bulletin
|December 1, 1987
PubMed
Summary
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The Social Security Administration

Area of Science:

  • Economics
  • Social Policy
  • Computational Social Science

Background:

  • Assessing the economic impact of tax and benefit policies is crucial for effective policymaking.
  • Existing models may not adequately capture the heterogeneity of individual economic circumstances.

Purpose of the Study:

  • To introduce the Simulated Tax and Transfer System (STATS) model, a microsimulation tool.
  • To demonstrate how the STATS model evaluates the economic status of population groups under policy changes.

Main Methods:

  • Utilizes a nationally representative household survey.
  • Employs a microsimulation approach, calculating taxes and benefits for individual cases.
  • Aggregates individual-level data to estimate group-level economic and demographic impacts.

Related Experiment Videos

Main Results:

  • The STATS model can estimate the effects of tax and benefit proposals on diverse population segments.
  • Illustrates policy analysis using a case study on Social Security benefit taxation.
  • Highlights the influence of data sources on model limitations.

Conclusions:

  • Microsimulation models like STATS provide valuable insights into policy impacts on economic status.
  • The STATS model offers a flexible framework for analyzing tax and transfer policies.
  • Understanding data limitations is essential for interpreting model outputs accurately.