Static Microsimulation Model Research Articles

Covid-19 heterogeneous effects on Italian workers’ incomes: the role of jobs routinization and teleworkability

PurposeThe Covid-19 pandemic appears to have engendered heterogeneous effects on individuals’ labour market prospects. This paper focuses on two possible sources of a heterogeneous exposition to labour market risks associated with the pandemic outbreak: the routine task content of the job and the teleworkability. To evaluate whether these dimensions played a crucial role in amplifying employment and wage gaps among workers, we focus on the case of Italy, the first EU country hit by Covid-19.Design/methodology/approachInvestigating the actual effect of the pandemic on workers employed in jobs with a different degree of teleworkability and routinization, using real microdata, is currently unfeasible. This is because longitudinal datasets collecting annual earnings and the detailed information about occupations needed to capture a job’s routine task content and teleworkability are not presently available. To simulate changes in the wage distribution for the year 2020, we have employed a static microsimulation model. This model is built on data from the Statistics on Income and Living Conditions (IT-SILC) survey, which has been enriched with administrative data and aligned with monthly observed labour market dynamics by industries and regions.FindingsWe measure the degree of job teleworkability and routinization with the teleworkability index (TWA) built by Sostero et al. (2020) and the routine-task-intensity index (RTI) developed by Cirillo et al. (2021), respectively. We find that RTI and TWA are negatively and positively associated with wages, respectively, and they are correlated with higher (respectively lower) risks of a large labour income drop due to the pandemic. Our evidence suggests that labour market risks related to the pandemic – and the associated new types of earnings inequality that may derive – are shaped by various factors (including TWA and RTI) instead of by a single dimension. However, differences in income drop risks for workers in jobs with varying degrees of teleworkability and routinization largely reduce when income support measures are considered, thus suggesting that the redistributive effect of the emergency measures implemented by the Italian government was rather effective.Originality/valueNo studies have so far investigated the effect of the pandemic on workers employed in jobs with a different degree of routinization and teleworkability in Italy. We thus investigate whether income drop risks in Italy in 2020 – before and after income support measures – differed among workers whose jobs are characterized by a different degree of RTI and TWA.

A cost analysis of upscaling access to continuity of midwifery carer: Population-based microsimulation in Queensland, Australia

ObjectiveTo quantify the economic impact of upscaling access to continuity of midwifery carer, compared with current standard maternity care, from the perspective of the public health care system. MethodsWe created a static microsimulation model based on a whole-of-population linked administrative data set containing all public hospital births in one Australian state (Queensland) between July 2017 to June 2018 (n = 37,701). This model was weighted to represent projected State-level births between July 2023 and June 2031. Woman and infant health service costs (inpatient, outpatient and emergency department) during pregnancy and birth were summed. The base model represented current standard maternity care and a counterfactual model represented two hypothetical scenarios where 50 % or 65 % of women giving birth would access continuity of midwifery carer. Costs were reported in 2021/22 AUD. ResultsThe estimated cost savings to Queensland public hospital funders per pregnancy were $336 in 2023/24 and $546 with 50 % access. With 65 % access, the cost savings were estimated to be $534 per pregnancy in 2023/24 and $839 in 2030/31. A total State-level annual cost saving of $12 million in 2023/24 and $19 million in 2030/31 was estimated with 50 % access. With 65 % access, total State-level annual cost savings were estimated to be $19 million in 2023/24 and $30 million in 2030/31. ConclusionEnabling most childbearing women in Australia to access continuity of midwifery carer would realise significant cost savings for the public health care system by reducing the rate of operative birth.

The Healthcare and Societal Costs of Familial Intellectual Disability.

Most of the studies on the cost of intellectual disability are limited to a healthcare perspective or cohorts composed of individuals where the etiology of the condition is a mixture of genetic and non-genetic factors. When used in policy development, these can impact the decisions made on the optimal allocation of resources. In our study, we have developed a static microsimulation model to estimate the healthcare, societal, and lifetime cost of individuals with familial intellectual disability, an inheritable form of the condition, to families and government. The results from our modeling show that the societal costs outweighed the health costs (approximately 89.2% and 10.8%, respectively). The lifetime cost of familial intellectual disability is approximately AUD 7 million per person and AUD 10.8 million per household. The lifetime costs to families are second to those of the Australian Commonwealth government (AUD 4.2 million and AUD 9.3 million per household, respectively). These findings suggest that familial intellectual disability is a very expensive condition, representing a significant cost to families and government. Understanding the drivers of familial intellectual disability, especially societal, can assist us in the development of policies aimed at improving health outcomes and greater access to social care for affected individuals and their families.

Impact of Universal Old Age Benefit to Revenue and Poverty Reduction in Tanzania

This manuscript analyzes the impact of old age benefit policy reforms on government revenue, income sharing, and poverty in Tanzania. This is an instrument for strengthening social protection. In this context, a universal old-age pension might assist Tanzania's Mainland in reducing income inequality in a similar manner to the positive outcome identified among developed countries in the European Union. This study uses a static microsimulation model for Tanzania (TAZMOD v2.4). The simulation model is based on social benefit reforms resulting from changes in the old age benefit policy. The two reforms were proposed. The findings found that in both proposed reforms, there is an increase in Government returns over taxes; Social Security Contribution (SSC) and indirect taxes increase by 5.31 percent from TSH 8,870,422.74 to TSH 9,368,616.08, respectively. Also, the share of the poor population decreased by 0.55%. Regarding the effect on poverty, it decreases by 0.55 percent in the two proposed reforms. The empirical results of the presented quantitative analyses have concrete policy implications: It can be concluded that there is an urgent need to reform the targeting of social pensions as the majority of the elderly and poor continue to be excluded from the benefits. The Government can introduce the old age benefit to people 60 years of age and older; hence, the outcomes are significant, and their space depends unfavorably on whether the profit sum is allocated. The government could improve old age benefits to address the issue of poverty and later improve old-age livelihoods.

The financial impact of offering publicly funded homebirths: A population-based microsimulation in Queensland, Australia

BackgroundDespite strong evidence of benefits and increasing consumer demand for homebirth, Australia has failed to effectively upscale it. To promote the adoption and expansion of homebirth in the public health care system, policymakers require quantifiable results to evaluate its economic value. To date, there has been limited evaluation of the financial impact of birth settings for women at low risk of pregnancy complications. ObjectiveThis study aimed to examine the difference in inpatient costs around birth between offering homebirth in the public maternity system versus not offering public homebirth to selected women who meet low-risk pregnancy criteria. MethodsWe used a whole-of-population linked administrative dataset containing all women who gave birth in Queensland (one Australian State) between 01/07/2012 and 30/06/2018 where publicly funded homebirth is not currently offered. We created a static microsimulation model to compare the inpatient cost difference for mother and baby around birth based on the women who gave birth between 01/07/2017 and 30/06/2018 (n = 36,314). The model comprised of a base model – representing standard public hospital care, and a counterfactual model – representing a hypothetical scenario where 5 % of women who gave birth in public hospitals planned to give birth at home prior to the onset of labour (n = 1816). Costs were reported in 2021/22 AUD. ResultsIn our hypothetical scenario, after considering the effect of assumptive place and mode of birth for these planned homebirths, the estimated State-level inpatient cost saving around birth (summed for mother and babies) per pregnancy were: AU$303.13 (to Queensland public hospitals) and AU$186.94 (to Queensland public hospital funders). This calculates to a total cost saving per annum of AU$11 million (to Queensland public hospitals) and AU$6.8 million (to Queensland public hospital funders). ConclusionA considerable amount of inpatient health care costs around birth could be saved if 5 % of women booked at their local public hospitals, planned to give birth at home through a public-funded homebirth program. This finding supports the establishment and expansion of the homebirth option in the public health care system.

Projecting the impact of air pollution on child stunting in India—synergies and trade-offs between climate change mitigation, ambient air quality control, and clean cooking access

Many children in India face the double burden of high exposure to ambient (AAP) and household air pollution, both of which can affect their linear growth. Although climate change mitigation is expected to decrease AAP, climate policies could increase the cost of clean cooking fuels. Here, we develop a static microsimulation model to project the air pollution-related burden of child stunting in India up to 2050 under four scenarios combining climate change mitigation (2 °C target) with national policies for AAP control and subsidised access to clean cooking. We link data from a nationally representative household survey, satellite-based estimates of fine particulate matter (PM2.5), a multi-dimensional demographic projection and PM2.5 and clean cooking access projections from an integrated assessment model. We find that the positive effects on child linear growth from reductions in AAP under the 2 °C Paris Agreement target could be fully offset by the negative effects of climate change mitigation through reduced clean cooking access. Targeted AAP control or subsidised access to clean cooking could shift this trade-off to result in net benefits of 2.8 (95% uncertainty interval [UI]: 1.4, 4.2) or 6.5 (UI: 6.3, 6.9) million cumulative prevented cases of child stunting between 2020–50 compared to business-as-usual. Implementation of integrated climate, air quality, and energy access interventions has a synergistic impact, reducing cumulative number of stunted children by 12.1 (UI: 10.7, 13.7) million compared to business-as-usual, with the largest health benefits experienced by the most disadvantaged children and geographic regions. Findings underscore the importance of complementing climate change mitigation efforts with targeted air quality and energy access policies to concurrently deliver on carbon mitigation, health and air pollution and energy poverty reduction goals in India.

SOS incomes: simulated effects of COVID-19 and emergency benefits on individual and household income distribution in Italy.

Using a static microsimulation model based on a link between survey and administrative data, this article investigates the effects of the pandemic on income distribution in Italy in 2020. The analysis focuses on both individuals and households by simulating through nowcasting techniques changes in labour income and in equivalized income, respectively. For both units of observations, we compare changes before and after social policy interventions, that is, automatic stabilizers and benefits introduced by the government to address the effects of the COVID-19 emergency. We find that the pandemic has led to a relatively greater drop in labour income for those lying in the poorest quantiles, which, however, benefited more from the income support benefits. As a result, compared with the ‘No-COVID scenario’, income poverty and inequality indices grow considerably when these benefits are not considered, whereas the poverty increase greatly narrows and inequality slightly decreases once social policy interventions are taken into account. This evidence signals the crucial role played by cash social transfers to contrast with the most serious economic consequences of the pandemic.

Current Development in Microsimulation and Experimental Innovation method in JUTTA Model

Nowadays, microsimulation method has been introduced to different fields, such as Social Science, Medicine research and Economic study. This method evaluates the effects of the proposed interventions or policies before they are implemented in the real world. In this article, we will concentrate on microsimulation method used in Social Science by firstly explaining two main streams in microsimulation world, Static approach and Dynamic approach. In the following section, the uncertainty of a Finnish static microsimulation model JUTTA is assessed and Toimtuki model, one of the sub-models in JUTTA is detected to have space to be more accurate. In order to do so, two experimental statistical models-Linear Regression model and Two-Stage Least Squares(2SLS) model are applied to it. From the results, we could conclude that both the Linear Regression and 2SLS successfully improves the accuracy of TOIMTUKI to some extent.

The impact of indirect tax on income distribution and poverty in Tanzania

AbstractThis paper analyzes the impacts of indirect tax benefits policy reforms on income distribution and poverty in Tanzania by applying a standard static microsimulation model TAZMOD v1.8. The simulations model two indirect tax reforms involving changes to the excise duty and value‐added tax rates on alcoholic beverages and tobacco products, and changes to employers’ and employees’ contributions to the National Health Insurance Fund. The results of the first reform find a positive effect on government tax revenue and a neutral effect on income distribution and poverty. The results of the second reform find a positive effect on household income distribution and consumption. The findings show that, despite increasing unequal income distribution, poverty indicators fell.

The opportunity costs of birth in Australia: Hospital resource savings for a post-COVID-19 era.

BackgroundCOVID‐19 caused significant disruptions to health systems globally; however, restricting the family presence during birth saw an increase in women considering community birth options. This study aimed to quantify the hospital resource savings that could occur if all low‐risk women in Australia gave birth at home or in birth centers.MethodsA whole‐of‐population linked administrative data set containing all women (n = 44 498) who gave birth in Queensland, Australia, between 01/07/2012 and 30/06/2015 was reweighted to represent all Australian women giving birth in 2017. A static microsimulation model of woman and infant health service resource use was created based on 2017 data. The model was comprised of a base model, representing "current" care, and a counterfactual model, representing hypothetical scenarios where all low‐risk Australian women gave birth at home or in birth centers.ResultsIf all low‐risk women gave birth at home in 2017, cesarean rates would have reduced from 13.4% to 2.7%. Similarly, there would have been 860 fewer inpatient bed days and 10.1 fewer hours of women's intensive care unit time per 1000 births. If all women gave birth in birth centers, cesarean rates would have reduced to 6.7%. In addition, over 760 inpatient bed days would have been saved along with 5.6 hours of women's intensive care unit time per 1000 births.ConclusionsSignificant health resource savings could occur by shifting low‐risk births from hospitals to home birth and birth center services. Greater examination of Australian women's preferences for home birth and birth center birth models of care is needed.

Effects of a minimum floor Price law on cigarette use in Oakland, California: A static microsimulation model

Tobacco minimum floor price laws (MFPLs) are a non-tax price policy that set a price below which tobacco products cannot be sold, thereby raising prices. Despite their growing interest among policy makers, little is known about the effects of local MFPLs on smoking prevalence or smoking intensity. We aimed to project the impact of a local tobacco MFPL on cigarette smoking prevalence and cigarette smoking intensity in Oakland, California, including detailed analysis of several important subpopulations. We used data collected between April 2017 and December 2019 from the California Behavioral Risk Factor Surveillance System and the National Youth Tobacco Survey to construct a static microsimulation model representative of Oakland. We projected the impact of MFPLs ranging from $8.00 to $13.00 per pack. All analyses were conducted between 2019 and 2020. With the introduction of an MFPL and assuming 15% policy evasion, mean price paid per pack was projected to increase by $1.05 to $4.69, cigarette smoking prevalence was projected to drop by 0.3% to 0.8%, and smoking intensity was projected to drop by 0.7% to 2.0% among continuing smokers. Total number of cigarettes smoked per month was projected to drop by 246,000 to 734,000 cigarettes, a 3.0% to 9.0% reduction from the current level (8.2 million cigarettes). The greatest reductions in cigarette smoking prevalence were among those aged 12 to 24-years-old, of non-Hispanic black or other race/ethnicity, and living below the federal poverty level. An MFPL in Oakland may substantially reduce cigarette use and target several important subpopulations.

Anti-Poverty Measures in Italy: A Microsimulation Analysis

Introduced in 2019, the Reddito di cittadinanza (RdC) has replaced the Reddito di inclusione (ReI) as a universal minimum income scheme in Italy. In this paper, we use BIMic, the Bank of Italy’s static (non-behavioural) microsimulation model, to measure the effects of the RdC in terms of inequality reduction and, as a novel contribution, of absolute poverty alleviation. Our results, which do not account for behavioural responses to policy changes, show that the RdC is effective in reducing inequality, and attenuating the incidence, and even more so the intensity, of absolute poverty. We also document how certain features of the design of this benefit affect the distribution of these effects across the population. For this purpose, we simulate two hypothetical changes to the current design of the RdC: one that directs more resources to large households with minors (on average more in need than other households) and the other that takes into account the differences in the cost of living according to geographical areas and municipality size.

Pobreza y desigualdad en Ecuador: modelo de microsimulación de beneficio fiscal

El objetivo de este artículo es presentar Ecuamod, el modelo de microsimulación de beneficios fiscales para Ecuador. Un modelo de microsimulación estática que combina reglas detalladas de política de país con microdatos representativos de la Encuesta nacional de ingresos y gastos de hogares urbanos y rurales (Enighur 2011-2012) para simular derechos de beneficios en efectivo, impuesto sobre la renta personal y pasivos de cotización a la seguridad social, así como IVA e impuestos especiales para el periodo de 2011 a 2017. Se analiza la importancia relativa de los componentes de los beneficios fiscales en la distribución del ingreso y el efecto de los instrumentos de impuestos sobre la pobreza y la desigualdad de los ingresos.

Industry 4.0 and some social consequences: Impact assessment by microsimulation for Hungary

AbstractThe expected future impact of the fourth industrial revolution is a hotly debated issue in the literature. The majority of papers focus on quantifying the expected impacts on labour demand, or on a specific country, or on huge macro-regions – and the estimates differ widely. Our paper focuses on the impact assessment of Industry 4.0 on the expected structure of employment, wages and inequalities in Hungary. We built a static microsimulation model for our analysis, where the “EU Survey of Income and Living Conditions Hungary 2017” dataset was used as a starting point. Projections by the European Centre for the Development of Vocational Training (CEDEFOP) were used for policy simulations on future employment by sector and by occupational group for each European Union (EU) member state. The analysis also elaborates our own augmented vision about the expected labour demand changes and expected wage trends. Based on this information, the spill-over effects were calculated regarding wage structure and inequalities by sector, region and the highest educational attainment.

Simulating the Impact of a Cigarette Minimum Floor Price Law on Adult Smoking Prevalence in California.

Minimum floor price laws (MFPLs) are an emerging tobacco control policy that sets a minimum price below which a specific tobacco product cannot be sold. MFPLs target cheaper products and may disproportionately impact consumers choosing low price brands or using discounts to reduce prices. We developed a static microsimulation model for California, United States to project short-term effects of different MFPL options for a 20-stick pack of cigarettes on adult smoking behaviors. We simulated 300 000 individuals defined by race and ethnicity, sex, age, and poverty status. Smoking behaviors and cigarette prices were assigned based on demographic distributions in the 2014-2016 California Behavioral Risk Factor Surveillance System. We drew 100 random samples (n = 30 000), weighted to state-level California demographic characteristics. We simulated six MFPL options and modeled impacts on smoking prevalence and cigarette consumption, in general, and separately for those in households below or above 250% of the federal poverty level, assuming a price elasticity of -0.4. Predicted changes in prices, prevalence, and consumption increased exponentially as the floor price increased from $7.00 to $9.50. Assuming 15% policy avoidance, projected increases in average cigarette prices ranged from $0.19 to $1.61. Decreases in smoking prevalence ranged from 0.05 to 0.43 percentage points, and decreases in average monthly cigarette consumption ranged from 1.4 to 12.3 cigarettes. Projected prices increased, and prevalence and consumption decreased, more among individuals in households below 250% federal poverty level. MFPLs are a promising tobacco control strategy with the potential to reduce socioeconomic disparities in cigarette smoking prevalence and consumption. Despite reductions in adult smoking prevalence, significant socioeconomic disparities remain, with lower-income groups smoking at substantially higher levels than higher-income groups. Policies that set a floor price below which a tobacco product cannot be sold could reduce socioeconomic disparities in smoking, depending on variation in prices paid by smokers prepolicy. By using a microsimulation model to predict changes in smoking for different population groups in California under several floor price scenarios, this study demonstrates that MFPLs have the potential to reduce adult smoking prevalence overall, and especially for lower-income tobacco users.

French do it better. The distributive effect of introducing French family fiscal policies in Italy

Italy has one of the lowest fertility rates in the world. A solution, often advocated to incentivize fertility, could be to reform the Italian fiscal system, taking inspiration from the French fiscal family treatment. This would imply introducing the quotient system, where taxation is not on an individual basis, as in Italy, but is applied to the family as a whole, and the cash benefits provided to families in France. The purpose of our paper is to assess the distributive effects of such a fiscal reform. We estimate these effects using MicroReg, a static microsimulation model that is able to predict the first-order effects of fiscal reforms. We show that a shift to the French income tax system would lead to decreased income inequality and a substantial tax reduction for households with three children, especially those with medium-high income. The new income tax would result in a substantial disincentive to female labor supply, albeit mitigated by greater progressivity in favor of low-income groups with children.

Quantifying the Redistributive Effect of the Erosion of the Italian Personal Income Tax Base: A Microsimulation Exercise

In recent years several sources of income have been excluded from the Italian Personal Income Tax (PIT) base and subject to alternative proportional systems or totally exempt from taxation. These changes have contributed to making PIT even more selective, accentuating vertical equity issues that have accompanied it since it was introduced in 1974. The aim of this paper is to calculate the redistributive effect following the erosion of the PIT base and the contribution of this phenomenon in determing the redistributive power of the Italian tax system, as well as the distribution of the fiscal benefits and burdens by deciles of income under the alternative tax rules considered. Using a static microsimulation model, the paper compares various versions of the tax system within a counterfactual logic: on the one hand, the existing legislation as of 2014 consisting of PIT and those incomes subject to substitute taxes or tax-free in this study; on the other hand, an hypothetical legislation which takes as a reference point the Comprehensive Income Tax (CIT) scheme and includes in its base all incomes replicated. The results demonstrate that the erosion of the PIT base has reduced the redistributive effect and the progressive nature of the Italian tax system.

The French Do It Better. The Distributive Effect of Introducing French Family Fiscal Policies in Italy

Italy has one of the lowest fertility rates in the world. A solution, often advocated to incentivize fertility, could be to reform the Italian fiscal system, taking inspiration from the French fiscal family treatment. This would imply introducing the quotient system, where taxation is not on an individual basis, as in Italy, but is applied to the family as a whole, and the cash benefits provided to families in France. The purpose of our paper is to assess the distributive effects of such a fiscal reform. We estimate these effects using MicroReg, a static microsimulation model that is able to predict the first-order effects of fiscal reforms. We show that a shift to the French income tax system would lead to decreased income inequality and a substantial tax reduction for households with three children, especially those with medium-high income. The new income tax would result in a substantial disincentive to female labor supply, albeit mitigated by greater progressivity in favor of low-income groups with children.

The burden of suboptimal breastfeeding in Mexico: Maternal health outcomes and costs.

Longer duration of breastfeeding is associated with a lower risk of type 2 diabetes, breast and ovarian cancer, myocardial infarction, and hypertension diseases in women. Mexico has one of the lowest breastfeeding rates worldwide; therefore, estimating the disease and economic burden of such rates is needed to influence public policy. We considered suboptimal breastfeeding when fewer than 95% of parous women breastfeed for less than 24months per child, according to the World Health Organization recommendations. We quantified the lifetime excess cases of maternal health outcomes, premature death, disability-adjusted life years, direct costs, and indirect costs attributable to suboptimal breastfeeding practices from Mexico in 2012. We used a static microsimulation model for a hypothetical cohort of 100,000 Mexican women to estimate the lifetime economic cost and disease burden of type 2 diabetes, breast and ovarian cancer, myocardial infarction, and hypertension in mothers, due to suboptimal breastfeeding, compared with an optimal scenario of 95% of parous women breastfeeding for 24months. We expressed cost in 2016 USD. We used a 3% discount rate and tested in sensitivity analysis 0% and 5% discount rates. We found that the 2012 suboptimal scenario was associated with 5,344 more cases of all analysed diseases, 1,681 additional premature deaths, 66,873 disability-adjusted life years, and 561.94 million USD for direct and indirect costs over the lifetime of a cohort of 1,116 million Mexican women. Findings suggest that investments in strategies to enable more women to optimally breastfeed could result in important health and cost savings.

Estimating the economic effects of pharmaceutical reimbursement scheme reform by microsimulation

Estimating the effects of reforms in advance is an important part of evidence-based and transparent legislative processes. The aim of this study was to describe a microsimulation method created to produce ex ante estimates of pharmaceutical pricing and reimbursement policy reforms. As a case example, the estimates for the 2016 pharmaceutical reimbursement scheme reform, including, e.g., the introduction of a €50 annual deductible, are presented. A static microsimulation model was developed based on the reimbursed purchases of 380,931 individuals drawn at random (10% sample) from the prescription register. The 2016 reform was projected to create savings of €44 million/year for the National Health Insurance (NHI). For patients, the median annual out-of-pocket costs increased from €78 to €96 (by +€18). For 97%, the estimated change was less than €50/year. The majority of patients whose out-of-pocket costs increased had relatively low prior costs. However, >€50/year increases predominantly affected patients entitled to higher reimbursements based on chronic or severe illnesses, among whom older and lower-income individuals were overrepresented. Increases of >€100 were rare (0.003%) and derived from exceptional circumstances. The microsimulation produced prompt but versatile estimates of the effects of legislative reforms by factoring in the entire spectrum of individual situations among affected patients.