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News 23.4.2013

A new model for simulating legislative amendments

Statistics Finland has published a model that simulates Finland's personal taxation and social security system for calculating the economic effects of legislative changes. The model has a larger data basis than before and a graphical user interface.

The new model brings Finnish microsimulation to a new era with its usability and calculation accuracy. The calculation accuracy of the model has improved along with the considerably larger individual data than before that better represent the population. A flexible user interface is tailored to the model, and the extensive register-based data can be used via remote access.

Statistics Finland produces the microsimulation model for the use of ministries, the Parliament, interest groups, universities and research institutions for scientific studies and statistical surveys concerning conditions in society. The aim is to increase the use of the model in research and in assessing policy alternatives, for example. Corresponding models have been used for quite some time now in Finland in the drafting of legislation on social security benefits and income taxation.

With the help of the model, the allocation of policy measures and the joint effects of legislative amendments can be evaluated. The model helps to assess changes in tax revenue caused by the measures, alterations in the financial position of individual persons and households, as well as income distribution and incentive effects.

Microsimulation model developed in collaboration

The Ministry of Finance launched the project for designing of the microsimulation model three years ago jointly with the Social Insurance Institution of Finland, the Ministry of Social Affairs and Health, the National Institute for Health and Welfare, and the Government Institute for Economic Research.

The construction, maintenance and development of the model were centralised to Statistics Finland. Statistics Finland has been building the model in close co-operation with the Research Department of the Social Insurance Institution of Finland in particular.

Further information about microsimulation

Olli Kannas +358 9 1734 3766, Jukka Mattila +358 9 1734 2475, Anne Perälahti +358 9 1734 2783