A Tax-Benefit Microsimulation Model for Italy: A Partial Evaluation of Fiscal Consolidation in the Period 2011-2014

43 Pages Posted: 25 Sep 2015

See all articles by Elena Giarda

Elena Giarda

Dipartimento di Analisi e Ricerca Economica, Prometeia; Università degli studi di Modena e Reggio Emilia (UNIMORE) - Center for Research in Banking and Finance (CEFIN); Fondazione Rodolfo Debenedetti

Massimo Baldini

Università degli studi di Modena e Reggio Emilia

Arianna Olivieri

Prometeia

Date Written: January 2015

Abstract

This paper develops a tax-benefit microsimulation model for the Italian economy to evaluate the impact of fiscal policy measures on household income. The simulations are performed on a dataset obtained from the matching of IT-SILC 2011 with HBS 2010, SHIW 2010 and IT-SILC 2008 to integrate income variables with consumption, financial assets and the tax base of property tax. The model quantifies the impact (the so-called first round effects) on household income of a set of fiscal policies implemented in Italy in the period 2011-2014: the increase in the ordinary VAT rate, the reintroduction of the property tax on the main home, the increase in the earnings tax credit, the 80-euro tax credit for employees, the modification of the personal income tax base and finally the rise of the tax rate on yields of deposits. We assess also the effects of changes of regional income taxes, despite not being part, strictly speaking, of the consolidation package. As a whole, the simulated average change in disposable income is negative.

Keywords: Microsimulation, Fiscal consolidation, Distributive analysis, Statistical matching

JEL Classification: D04, D31, H31, C81

Suggested Citation

Giarda, Elena and Baldini, Massimo and Olivieri, Arianna, A Tax-Benefit Microsimulation Model for Italy: A Partial Evaluation of Fiscal Consolidation in the Period 2011-2014 (January 2015). Available at SSRN: https://ssrn.com/abstract=2665547 or http://dx.doi.org/10.2139/ssrn.2665547

Elena Giarda (Contact Author)

Dipartimento di Analisi e Ricerca Economica, Prometeia ( email )

Via G. Marconi 43
Bologna, 40122
Italy
+390516480911 (Phone)
+39051220753 (Fax)

HOME PAGE: http://https://www.prometeia.it/en/research-insights

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Center for Research in Banking and Finance (CEFIN) ( email )

via Berengario 51
Modena, modena I-41100
Italy

Fondazione Rodolfo Debenedetti ( email )

Via Roentgen 1,
Room 5.C1-11
Milan, Milano 20136
Italy

Massimo Baldini

Università degli studi di Modena e Reggio Emilia ( email )

Viale A. Allegri 9
41100 Modena, Modena 42121
Italy

Arianna Olivieri

Prometeia ( email )

Italy

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