Abstract

We provide an overview of microsimulation approaches for assessing the effects of policy on income distribution. We focus on the role of tax-benefit policies and review the concept of microsimulation and how it contributes to the analysis of income distribution in general and policy evaluation in particular. We consider the main challenges and limitations of this approach and discuss directions for future developments.

Keywords

Microsimulation models, Income distribution, Tax-benefit policies

JEL Classification Codes

C81, D31, H30, I30

24.1.