ABSTRACT
This chapter describes the tax-benefit microsimulation methodology. It also describes the welfare impact of labour market and tax-benefit changes. Microsimulation analysis is particularly useful methodology for counterfactual simulation, which can help to explain the functioning of the tax-benefit system relative to alternatives. In Ireland, the SWITCH model has been used for 20 years to assess the impact of policy change on inequality. The Irish tax-benefit system falls within the Anglo-liberal category of welfare states, social transfers have primarily a poverty reduction focus based around flat rate insurance benefits, or means tested benefits. Statistics on Income and Living Conditions (SILC) is a dataset that has been collected in Ireland since 2003 and is the successor to the earlier European Community Household Panel Survey. The European Union Statistics on Income and Living Conditions (EU-SILC) is collected at the national level, with a harmonized version supplied to Eurostat, which is then processed and provided to researchers as a harmonized User Database (UDB).
