Rusmod -- a Tool for Distributional Analysis in the Russian Federation

48 Pages Posted: 4 Sep 2019

See all articles by Mikhail Matytsin

Mikhail Matytsin

World Bank

Daria Popova

University of Essex - Institute for Social and Economic Research (ISER)

Samuel Freije-Rodriguez

World Bank

Date Written: September 3, 2019

Abstract

The purpose of this paper is to introduce applications of RUSMOD -- a microsimulation model for fiscal incidence analysis in the Russian Federation. RUSMOD combines household survey micro-data and fiscal policy rules to simulate the Russian tax-benefit system: the size and distribution of taxes collected and benefits paid, and the impact of the system on different population groups. Microsimulation models, such as RUSMOD, are habitually used in developed countries, and can be versatile budgetary policy tools. Using this model, the current tax-benefit system in Russia is examined. The impact of the system is measured across the income distribution, age groups, family types, localities, as well as across time. One of the applications of RUSMOD this paper aims to assess is the role of the tax-benefit system in explaining the incidence of informal employment in Russia. The paper investigates whether the existing system creates disincentives for formalization in terms of reducing disposable incomes and increasing poverty and inequality, and whether a hypothetical tax reform would be able to reduce the opportunity costs of formalization for informal workers, improve distributional outcomes, and increase fiscal revenues.

Suggested Citation

Matytsin, Mikhail and Popova, Daria and Freije-Rodriguez, Samuel, Rusmod -- a Tool for Distributional Analysis in the Russian Federation (September 3, 2019). World Bank Policy Research Working Paper No. 8994. Available at SSRN: https://ssrn.com/abstract=3447622

Mikhail Matytsin (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Daria Popova

University of Essex - Institute for Social and Economic Research (ISER) ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Samuel Freije-Rodriguez

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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