1. Euromod Item 4.2 of the agenda
DSS Meeting
May 2019

2. EUROMOD - tax-benefit microsimulation model for the EU
Widely used by academics and policy makers to evaluate and/or launch new policies (effects of taxes and benefits on household incomes and work incentives)
Used e.g. for
Quantitative policy analysis and monitoring (Europe 2020, European Pillar of Social Rights)
Experimental statistics on income poverty and inequality (FE)
Estimating redistributive effects of tax-benefit policies
From the exploratory work carried out since 2017, general elements can be drawn.

3. Detailed variables
2 main inputs to run EM – policy rules and input microdata sets
How to prepare EM input datasets?
 var. based on UDB / national SILC
 need of detailed info: reconstructing some or all the original variables (mainly income components)
How ?
Using the national SILC dataset instead of the UDB (SK)
Combining some detailed components from the national version of the EU-SILC with the UDB (CZ)
Imputing individual components of each harmonised variable (DE)
Straightforward derivation
2nd finding: The model relies on detailed information at the individual level
NTs split the disaggregated benefits collected from EU-SILC. How ?
Complex imputation procedure

4. Detailed benefit variables
From 2014 (reference year) onwards, harmonised benefit var disaggregated into 4 sub-components + metadata
 imputations more precise
 but quality lower than var provided directly
 EM results subjects to errors
Main detailed benefits collected and available at the level of granularity necessary for EM in NSIs

5. Eurostat objectives
Enhanced EU-SILC data with more detailed info (income components) to get a UDB for Euromod
Why and how?
 avoid imputing many EM var (complex procedures)
 no additional data collection (limited impact on the NSIs)
First exploratory work on national detailed data received conclusive (EM var straightforward derived from SILC data)
Considering the comments mentioned previously, Eurostat set up 6 main objectives
[the detailed data on benefits needed are already collected by NSIs to create the aggregated EU-SILC variables. Only the delivery of these existing detailed data, in addition to the EU-SILC data
the NSIs tasks will not be increased for the Member States which already provide their national SILC data directly to the national teams (EL, IT, SK, AT, UK). Only some additional metadata will need to be provided to explain further the national data.
Some NSIs already provide on, either a regular basis or occasionally, a subset of their national SILC data to the national teams to supplement the UDB variables (BE, CZ, EE, FI, LT, LU, LV, NL, PL, SI) so that the impact of the EUROMOD transfer will be also very small.
The initial change will be a bit more important only for countries currently resorting to UDB data to derive the EUROMOD variables but again without requiring any additional data collection]
To assess the added value of using detailed information, Eurostat already contacted some countries with a view to preparing future work -> thank you countries who sent their national data

6. Detailed benefits in the current Euromod
Detailed benefits description in EU-SILC metadata file (included in HY054)
Detailed benefits in the current Euromod
input data
(1)
(2)
Child allowance
Parental allowance
Equalising contribution -
Other cash benefits
Child-birth contribution
Child care allowance
Regular foster care benefits
Lump-sum foster care benefits
Other family benefits 8
4 + 1
Family/Children-related allowances, component HY054 non-contributory and non means-tested
Family/Children-related allowances
aaa – benefit present in EU-SILC disaggregated benefits metadata file
bbb – benefit present both in EU-SILC disaggregated benefits metadata file and EUROMOD input file (as a straightforward derived variable)
ccc – imputed benefit only in EUROMOD input file

7. Detailed benefits description in EU-SILC metadata file (included in HY054)
Detailed benefits in the current Euromod
input data
Eurostat objectives for Euromod
Target 1 (full details)
Target 2 (more details)
(1)
(2)
(3)
(4)
Child allowance
Parental allowance
Equalising contribution -
Other cash benefits
Child-birth contribution
Child care allowance
Regular foster care benefits
Other foster care benefits
Lump-sum foster care benefits
Other family benefits
Family/Children-related allowances, component HY054 non-contributory and non means-tested
blue – benefit present in EU-SILC disaggregated benefits metadata file
green – benefit present both in EU-SILC disaggregated benefits metadata file and EUROMOD input file (as a straightforward derived variable)
red – imputed benefit only in EUROMOD input file 8
4 + 2
4 + 1

8. Eurostat objectives
Use non disseminated var (to date) to reduce the imputations (combination of PDB and UDB var) (when preparing the EM input data)
Keep the EM NTs expertise → role in the creation of the EM input file when country-specific knowledge required
Ensure the quality of the detailed datasets
Input file based on an enhanced UDB = current UDB + detailed var + PDB
Ensure compliance with the ESS quality framework

9. Eurostat objectives
Ensure actors involved in the preparation of EM data access the enriched EU-SILC
EM input file based on more detailed information  dissemination of those microdata at stake
2 solutions to deal with in-depth and to discuss (in June 2019 WG ?)
Upgrading the current agreement and disseminate the enhanced detailed UDB to JRC and NTs
Altering the data which can’t be disseminated but any effects on the microsimulation results?
Put in place a new production architecture to integrate EM requirements
2 solutions have been already contemplated to overcome that issue. But we need to deal with them in-depth and discuss with you

10. Financial support Help MS in their capacity building Topics covered
Further work on income components (more detailed var., better categorization, classification)
Guarantee the quality of the new provided detailed data (national var)
IT development to include the new detailed data in the current national production chain
Methodological activities to ensure further data protection without reducing the granularity and the statistical relevance (ensure EM users access to the future input data files)
Our objectives are challenging, we need your support to fulfil them, that’s why Eurostat has launched mid March a call for proposals to provide a financial support to carry out activities on the regionalisation of SILC and EM
Better categorization: non means-tested , contributory
Better classification: income component under sickness allowance rather than family/children related allowances
Subcontracting allowed (with NT)

11. Financial support One-off opportunity to get financial help
Deadline : 16/07/ h00
There are challenging objectives, we need your support to fulfil those objectives, that’s why Eurostat has launched mid March a call for proposals to provide a financial support to carry out activities on the regionalisation of SILC and EM
Subcontracting allowed (with NT)

12. Summary EM model needs detailed information
Detailed data collected but not (always) disseminated/used (national SILC, PDB)
Aim: simplify and harmonise EM input file process but keep the country-specificities (NTs role)
Methodological work and IT development needed to be ready by the end of the internalisation
Financial supports provided

13. The DSS is invited to
Take note of the development of activities on EM and support Eurostat's objectives
Continue and reinforce the cooperation with Eurostat, in particular by applying in the context of grants actions to meet EUROMOD data requirement
Provide recommendations for further methodological steps in the context of technical discussions in WG ILC meetings