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Peer Review in Austria: The political adequacy of quantitative impact assessment in the social field using micro-simulation models

04/12/2014
Peer Review in Austria: The political adequacy of quantitative impact assessment in the social field using micro-simulation models © roman_malyshev, Fotolia

Quantitative models which simulate the probable effect of changes in taxes and welfare benefits can provide policy-makers with a useful evidence base, and can enable stakeholders such as NGOs to play a more active role in policy formation. Austria has broken new ground by creating an easy-to-use public website that enables any citizen to calculate the effects of tax and benefit changes on different sections of the population.

Host Country: Austria

Date: 4-5 December 2014

Peer countries: Belgium – Croatia – Cyprus – Czech Republic – Ireland – Latvia – Netherlands – United Kingdom

Key messages that emerged during the discussion:

  • Building customisable national web front-ends for the EUROMOD simulation engine is a replicable initiative. Besides the set-up costs, constant support (including funding to run a micro-simulation model) must be ensured.
  • NGOs representing the target groups of social policy are key potential users, and should therefore be involved in the design of such websites.
  • There are persuasive arguments for developing systems with two interfaces – a user-friendly but limited one for use by the general public, and a more flexible one for expert users.
  • There is a need to extend EUROMOD to include the modelling of indirect taxes, such as VAT, alcohol and tobacco duty, as well as wealth taxes.
  • There is a good case for including gender impact assessment in micro-simulations, if this is easy to implement, for example related to pension issues.
  • A forum for the exchange of experience and transfer of good practice is needed.
  • Tax-benefit micro-simulation could be useful to assess the impact of potential social policy reforms (such as changes in benefits and services) on poverty and social exclusion. It can also be used to evaluate policy approaches announced in the Social Investment Package (investing in children, activating and enabling benefits, etc.). However, because of the time it takes for impacts to feed through, the results of static modelling must be interpreted with caution.

Peer Review Manager

Ulrike Hiebl (ÖSB Consulting GmbH)