Baseline results from the new EU27 EUROMOD (2007-2010)

Abstract

This paper
provides a description of the latest public release of EUROMOD (version
F6.0++), a tax-benefit microsimulation model for the EU. First, we briefly
report the process of constructing and updating EUROMOD. We then present
indicators for income inequality and risk of poverty using EUROMOD and discuss
the main reasons for differences between these and EU-SILC based indicators. We
further compare EUROMOD indicators across countries and over time between 2007
and 2010. Finally, we provide estimates of marginal effective tax rates (METR)
for all 27 EU countries in order to explore the effect of tax and benefit
systems on work incentives at the intensive margin. Throughout we highlight
both the potential of EUROMOD as a tool for policy analysis and the caveats
that should be borne in mind when using it and interpreting results.