Improving the Validity of Microsimulation Results: Lessons from Slovakia

  • 9. 9. 2016

In this paper we introduce a microsimulation model of the Slovak tax and transfer system SIMTASK.

It presents a complex toolkit for static microsimulations. Compared to earlier version of the CBR microsimulation model, simulated results are closer to reality. This has been achieved by recalibrating sample weights of the input database, where the income distribution has been taken into account directly. The improved fit is documented by validating the tax and transfer aggregates using both the original sample weights and the new ones against external data. Along with some other refinements to the model and external data considerations, the paper concludes that the validity of SIMTASK improved in terms of personal income tax simulations, social security contributions simulations, as well as simulations of family related benefits.

Keywords: microsimulation, EUROMOD, tax and transfer policy, Slovakia

JEL classification: C81, I38, H24