The Non-Behavioral Module of the Italian Microsimulation Model EconLav

Government of the Italian Republic (Italy), Ministry of Economy and Finance, Department of the Treasury Working Paper No. 2

18 Pages Posted: 25 Feb 2013

See all articles by Angela Cipollone

Angela Cipollone

LUISS Guido Carli University

Manuela Coromaldi

University of Rome II

Nicola Curci

Bank of Italy

Giuseppe De Luca

University of Palermo - d/SEAS

Domenico Depalo

Bank of Italy

Claudio Rossetti

LUISS Guido Carli University

Date Written: January 31, 2013

Abstract

This paper presents the non-behavioral module of EconLav, a new microsimulation model of the Italian tax-benefit system which is coordinated by ISFOL with the support of the Ministry of Economy and Finance and the Ministry of Labor. First, we describe a number of data quality issues which often arise in the development of a microsimulation model and the strategies adopted to cope with these issues. Then, we discuss the most important features of our model including estimation of incomes from work hidden to tax authorities, simulation of accounting rules embedded in the Italian tax-benefit system, software implementation and other relevant computational issues. Model's performances are assessed by comparing weighted predictions of the main tax aggregates with the corresponding figures from administrative tax data. Furthermore, we use the non-behavioral module of EconLav to compute marginal effective tax rates (METRs) for different groups of the Italian population.

Keywords: Microsimulation models, tax-benefit system, policy evaluation, policy design, data quality issues, marginal effective tax rates

JEL Classification: C42, C81, D10, D31, H31

Suggested Citation

Cipollone, Angela and Coromaldi, Manuela and Curci, Nicola and De Luca, Giuseppe and Depalo, Domenico and Rossetti, Claudio, The Non-Behavioral Module of the Italian Microsimulation Model EconLav (January 31, 2013). Government of the Italian Republic (Italy), Ministry of Economy and Finance, Department of the Treasury Working Paper No. 2. Available at SSRN: https://ssrn.com/abstract=2223894

Angela Cipollone (Contact Author)

LUISS Guido Carli University

Via O. Tommasini 1
Rome, Roma 00100
Italy

Manuela Coromaldi

University of Rome II ( email )

Via di Tor Vergata
Rome, Lazio
Italy

Nicola Curci

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Giuseppe De Luca

University of Palermo - d/SEAS

Viale delle Scienze, edificio 13
Palermo, 90124
Italy

Domenico Depalo

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Claudio Rossetti

LUISS Guido Carli University ( email )

Via O. Tommasini 1
Rome, Roma 00100
Italy

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