Book of Abstracts

Survivors’ pensions have long served as a central pillar of social protection in Beveridgean pension systems, offering intrafamilial insurance against the economic consequences of widowhood. Yet demographic ageing, evolving family structures, and gendered labour‑market patterns increasingly call into question the appropriateness and sustainability of marital-status‑based entitlements. Drawing on recent European jurisprudence and ongoing reform debates in Switzerland, Finland, Germany, and Japan, the project examines how the abolition or redesign of survivors’ pensions would affect vertical solidarity in a Beveridgean first‑pillar pension system. Using the Swiss Old‑Age and Survivors’ Insurance (OASI) as an illustrative case, the analysis explores how interpersonal redistribution, intrafamilial solidarity, and spousal equalisation mechanisms jointly shape pension outcomes across marital statuses and along the pension‑income distribution. The study employs MIDAS‑CH, a dynamic microsimulation model calibrated to Swiss SILC data, to generate long‑term counterfactual life‑course trajectories under shifting gender labour‑market behaviours. This enables an assessment of how redistribution embedded in the Swiss first pillar—minimum and maximum pensions, care credits, splitting rules, and survivor benefits—operates in a context where men’s and women’s participation, hours, and wages converge. As family structures diversify and dual-earner households become the norm, traditional justifications for marital entitlements weaken, suggesting that solidarity mechanisms may need to shift from status-based to individualised forms. To identify the redistribution channels at work, the project applies a Recentered Influence Function (RIF) decomposition, which separates differences in characteristics (earnings histories, contribution years, care credits) from differences in coefficients, interpreted as the redistributive valuation embedded in the benefit formula. This distinction allows a distribution‑sensitive quantification of vertical solidarity and an assessment of how strongly various institutional components compensate gendered labour‑market inequalities. The RIF approach provides insight into nonlinear redistribution at the bottom, middle, and top of the pension distribution—precisely where floors, ceilings, credit valuation, and splitting rules bite. Simulation results show that survivors’ benefits play a meaningful but declining role in equalising outcomes, particularly as women accumulate stronger contributory records. Removing survivor pensions lowers intrafamilial solidarity but increases the relative importance of interpersonal redistribution, especially for low‑income individuals. When labour‑market participation, work intensity, and wages between men and women are equalised, women’s pensions rise markedly, while men’s decline modestly. Consequently, the gender pension gap narrows substantially through improved earnings capacity rather than through marital entitlements. In scenarios of full labour‑market convergence, marital-status‑based mechanisms—splitting, capping, and survivors’ benefits—become less central, while individualised solidarity instruments such as minimum pensions and care credits remain decisive. These findings highlight a fundamental shift in the organisation of solidarity within Beveridgean pension systems. As gender labour‑market trajectories converge and family forms diversify, the rationale for marital entitlements weakens, and the effectiveness of solidarity increasingly depends on individualised, needs‑based instruments rather than derived rights. Vertical solidarity remains essential for cushioning fragmented careers and low earnings, but its incidence evolves as women’s labour‑market attachment strengthens. In this environment, survivor protection can be better targeted through time‑limited or earnings‑tested supplements, while care credits and progressive benefit formulas remain central to mitigating gendere

This paper compares the distributional incidence of three decarbonization instruments in the Belgian residential sector: EPC‑based minimum standards, carbon pricing with an equal per‑household dividend, and renovation subsidies financed by a uniform lump‑sum tax. Using Woonsurvey 2018 and a dwelling‑level microsimulation model that evaluates renovation profitability on observed energy use, we quantify household monetary impacts, renovation take‑up, and equity (across and within income groups) for budget neutral policies calibrated to common C02 targets. Three results stand out. First, EPC standards concentrate burdens on low‑income and low‑use households and generate high dispersion because they compel renovations where realized savings are small. Second, universal subsidies are costly on average and distribute benefits unevenly, with sizable transfers to infra‑marginal projects. Third, carbon pricing with revenue recycling yields the lowest and most evenly distributed household burdens, largely because it triggers heat‑pump adoption in dwellings with the highest energy consumption. We further show that combining a modest carbon price with targeted heat‑pump support can meet the same emissions target at lower cost and with a smaller variance of household impacts than under the carbon dividend. Results are robust to rebound, landlord–tenant limits, and reasonable variations in discounting, horizons, and costs.

Ireland is an outlier among European countries in that it has no automatic indexation of tax and welfare parameters. As a result, the annual Budget announcement plays a significant role, both in shaping the government’s discretionary policy priorities and in influencing people’s expectations about the future. In this project, we study Budget Day as a signalling device along two margins. First, we ask how discretionary policy choices across spending areas respond to political economy forces: media attention, organised interest-group pressure, and electoral cycles. Second, we examine whether Budget announcements shift individuals beliefs about redistribution and uncertainty about the future, and whether these responses are heterogeneous by predicted exposure to the announced measures. In terms of conceptual framework and methods, we build on the literature on central bank communication, which uses language analysis and treats policy announcements as signals that shape expectations (Hansen et al., 2018; Ehrmann and Talmi, 2020). A related strand of work studies the political economy of budget trade-offs (Adolph et al., 2020) and the role of information flows in distinguishing anticipated from unanticipated fiscal policy in budget announcements (Leeper et al., 2013). Balladares and Garcia-Miralles (2025) trace fiscal drag in Spain over time, while in the Irish context (Boyd and McIndoe-Calder, 2025) the focus is on personal income tax over a shorter horizon (2019-2023), using microsimulation modelling with EUROMOD. However, there is little long-run evidence on Irish budget cycles or their political determinants beyond the aggregate analysis in Cousins (2007). In the first part of this paper, we build a new historical dataset of Irish budgets from the mid-1990s onward, coding discretionary changes by broad policy area. We benchmark each years policy package against a counterfactual that mechanically indexes key tax and welfare parameters to price and wage inflation. Deviations from this benchmark provide a transparent measure of discretionary policy priorities. We then relate these deviations to (i) topic-level media salience indices constructed using text analysis of newspaper coverage, (ii) measures of lobbying intensity proxied by pre-budget submissions and public representations by sector, and (iii) electoral timing and macroeconomic conditions. In the second part, we analyse individual-level survey data to examine perceptions of redistribution, fairness, and uncertainty about the future in relation to budget announcements. Microsimulation using EUROMOD allows us to account for heterogeneity in responses, in particular whether individuals or households that are likely to gain or lose from policy changes react differently. We exploit variation in interview timing relative to Budget Day using the Irish sample of the European Social Survey, complemented by Eurobarometer data. Our work provides a systematic assessment of Irish budget priorities and contributes to the debate on whether indexation would reduce fiscal drag and depoliticise distributional choices, or whether discretionary budgets are instead responsive to public preferences.

Comparative pension microsimulation supports coherent cross-country policy analysis by us-ing harmonised inputs such as EU-SILC. Yet institutional heterogeneity and limited life-course information in standardised surveys constrain how credibly national rules, accrual mecha-nisms, and retirement pathways can be represented within a portable framework. Portability is feasible, but for most countries the feasibility frontier is set by what can be inferred from harmonised data and how much institutional detail can be included without sacrificing com-parability. We explore the validity domain of comparative modelling by benchmarking a comparative model against a detailed national model in a controlled “sister-model” setting. Our compar-ative model is microWELT, designed for multi-country applications and therefore built around portable representations of labour-market and retirement transitions and simplified pension benefit calculations. Retirement timing follows parsimonious rules centred on statutory ages, and benefits are approximated via mappings from pre-retirement earnings. microWELT is pa-rameterised for eight European countries and serves as a uniform base for refining national applications. We compare microWELT to microDEMS, a closely related detailed Austrian model built on longitudinal administrative data. microDEMS reconstructs employment and insurance careers and implements Austrian pension law at a granular level, including path-way-specific eligibility and benefit calculations that depend on accumulated insurance peri-ods and full contribution histories. This pairing allows us to attribute projection differences directly to data richness and institutional detail - rather than to unrelated modelling choices. Empirically, we use Austria’s reform harmonising women’s statutory retirement age with men’s as a demanding test case. Although the reform is simple to describe, it is difficult to capture with stylised comparative rules because it is phased in over time and interacts with multiple exit routes from the labour market whose availability depends on career histories. We run matched baseline and reform scenarios focussing on retirement transitions over the next decade under harmonised demographic and macro assumptions and compare age- and cohort-specific retirement and employment profiles as well as the timing of pension claiming and aggregate expenditure trajectories.

Microsimulation techniques are widely used to study the impact of (reforms in) fiscal and social policies in mature welfare states, providing interesting insights into how today policies reduce poverty, redistribute resources among population groups and shape incentives for instance to work or save. While a lot has been written on the historical emergence and expansion of welfare states on an institutional level, hardly anything is known about the impact early-stage welfare states had on the lives of ordinary people. Most European countries saw the emergence and rapid expansion of their welfare states in the three decades after the Second World War, usually referred to as the Golden Age. It is often inferred that this must have been a period in which everyone was better off, in large part attributed to strong social protection. Yet, the empirical evidence is lacking as the literature typically focuses on the top 10% and the role of top marginal tax rates. In this paper we present for the first time preliminary results from a project that develops a historical microsimulation model for the Netherlands, a particularly interesting case as it went from being one of the lowest to one of the highest spending welfare states. In practice, we simulate cash social transfers, social insurance contributions and the personal income tax for several years between 1950 and 1975 based on official legislative documents. For the present paper the model will be combined with hypothetical household data in order to analyse key policy indicators for household types differing along socio-demographic characteristics and income levels. Such an analysis provides valuable insights into the intentions of historical policymakers. In a later stage the aim is to combine the microsimulation model with representative microdata of the Dutch population in order to study policy outcomes such as redistribution and poverty reduction and to contrast outcomes with intentions.

The relationship between income and carbon dioxide (CO₂) emissions has been debated in the environmental economics literature, primarily through two complementary but conceptually distinct frameworks. At the macro level, the Environmental Kuznets Curve (EKC) hypothesis posits a non-linear relationship between economic development and emissions, whereby emissions initially increase with income growth before stabilising or declining at higher income levels. At the micro level, Environmental Engel Curves (EECs) describe how household-level emissions vary with income within a given country, reflecting differences in consumption patterns, energy use, and access to carbon-intensive goods and services. These two literatures typically developed separately, leaving a gap: we have limited evidence on how the within-country income-emissions relationship evolves as an economy moves along its development path. To our knowledge, only one study examine temporal changes in the distribution of household CO₂ emissions within a single country, notably Sager (2019) for the United States. This paper studies the evolution of Environmental Engel Curves over time using six waves of the Irish Household Budget Survey (HBS) from the early 1980s to 2015, a period during which Ireland experienced exceptionally rapid income growth and major changes in consumption opportunities and energy use. We estimate income-emissions relationship for multiple points along Ireland’s development trajectory and ask: How does the shape of the EEC change as a country transitions from lower- to higher-income status? In doing so, we explicitly separate two mechanisms that are easily confounded in cross-sectional work: (i) changes in the carbon content of given consumption categories (i.e. carbon intensity of heating) and (ii) changes in the prevalence of carbon-intensive durables (i.e. personal vehicles) across the income distribution (extensive margin). We focus, in particular, on direct household energy use, focusing on residential heating fuels and private transport (vehicle ownership), which are plausible channels through which development alters EEC shape. These categories are where diffusion, infrastructure constraints, and policy-induced technology change are most likely to generate non-linearities. By documenting how EECs shift and re-shape across three decades of development within a single country, the paper complements cross-country evidence on heterogeneous distributional incidence (Dorband et al., 2019) and time-series evidence for the United States (Sager, 2019). We show that the EKC can be understood as the outcome of changing Environmental Engel Curves over the development process, driven by the diffusion and saturation of carbon-intensive household technologies. References Dorband, I. I., Jakob, M., Kalkuhl, M., & Steckel, J. C. (2019). Poverty and distributional effects of carbon pricing in low- and middle-income countries – A global comparative analysis. World Development, 115, 246–257. https://doi.org/10.1016/j.worlddev.2018.11.015 Sager, L. (2019). Income inequality and carbon consumption: Evidence from Environmental Engel curves. Energy Economics, 84, 104507. https://doi.org/10.1016/j.eneco.2019.104507

I am a Research Associate at PolicyEngine, a nonprofit that provides free, open-source software to compute the impact of public policy in the US and UK. Previously, I served as a researcher at the London School of Economics. My work focuses on microsimulation, economic modelling, and public policy analysis, particularly the UK tax and benefit system. In this session, I’m going to introduce a firm microsimulation methodology for policy analysis. This framework generates synthetic firm populations calibrated to official statistics through multi-objective optimisation, matching distributional targets across turnover, sector, and employment from multiple administrative data. We then layer behavioural responses onto this synthetic population using bunching estimation methods from Saez (2010), Kleven and Waseem (2013), and Liu and Lockwood (2015). We demonstrate the methodology through UK VAT threshold analysis: firms near the registration threshold face incentives to stay just below it, creating bunching in the turnover distribution; we estimate how strongly firms respond by comparing the observed distribution to a no-bunching counterfactual, then simulate how firms would redistribute under alternative policy designs. The session covers synthetic data generation, PyTorch-based calibration, behavioural response estimation, and policy simulation using PolicyEngine’s open-source Python-based platform. While household microsimulation is widely used, the absence of firm microdata results in firm-level microsimulation being less common, despite businesses being central to tax policy. Developing firm-level microsimulation opens new research directions, particularly when linked to household models, enabling analysis of how business taxes pass through to consumer prices, how firm-level policy changes affect employment and wages, and how supply-side interventions are distributed across income groups. One direct application is VAT threshold analysis: the UK requires businesses to register for VAT and charge 20 percent on sales once annual turnover exceeds £90,000, and there is active policy debate about raising this threshold. Firm microsimulation enables analysis of different registration thresholds and smoothed phase-ins on revenues and firm counts, questions relevant to the economic growth literature. We benchmark static results against HMRCs published projections for raising the threshold from £85,000 to £90,000, achieving approximately 90 percent alignment with official costings.

Since the pioneering work of, a.o. François Bourguignon at the end of the 1980s, the field of linking micro-simulation and macro-economic models has generated a growing number of publications. Empirical applications foster notably in the areas of tax and trade policies, climate change, poverty reduction and structural reform. While CGE models are the overwhelmingly preferred choice for representing the macroeconomy, estimated macro‑econometric models are much less frequently used for that purpose. For a small country, Luxembourg exhibits a relative richness of large-scale models: recent work counts 3 microsimulation and at least 4 macro-economic models. This work links STATEC’s macroeconometric workhorse “Modux” with IGSS’s microsimulation tool “SPAFIL”. Both have been widely used in forecasting and/or policy analysis but never so far in combined simulations. The purpose of this work is hence to link both models and to generate a number of common shocks: reduction in household taxes, decrease in financial sector activity, etc. The shocks are simulated iteratively, with a set of pertinent variables exported sequentially in both directions. Convergence is assured but not full. Main results consist of a modified macroeconomic trajectory integrated into SPAFIL and the inclusion of distributional effects concerning households in Modux. The latter also has the potential to – sometimes substantially – change the macroeconomic outcome and, prominently so, the Keynesian multiplier.

Demographic change poses profound challenges to labor markets across advanced economies. Population ageing is increasing pressure on public social security systems in many countries. These developments have intensified the policy debate on how to extend working lives and increase labor force participation at older ages. Against this background, promoting labor force participation among individuals close to or beyond statutory retirement age has gained increasing importance. In the German policy debate, one prominent example of such an approach is the “active pension” scheme (Aktivrente) recently introduced in 2026. This policy allows employed pensioners to earn additional income up to a specified monthly threshold without being subject to income taxation. While the intended goal of these measures is to encourage voluntary labor supply at older ages, their actual quantitative effects on employment and public finances remain uncertain. Traditional models in pension economics typically conceptualize retirement as a discrete and absorbing state, in which labor force participation ends entirely upon retirement. In light of changing employment biographies and policy initiatives aimed at extending working lives, this limitation has become increasingly problematic. A methodological extension of existing microsimulation models that explicitly accounts for labor supply decisions at older ages, through differentiated transition scenarios, earnings rules, or tax allowances, is therefore required to reliably assess the effects of such reforms. The paper at hand addresses this methodological challenge using Germany as a case study. It examines to what extent microsimulation approaches behavioral adjustments can be further developed to analyze policy measures that create labor supply incentives for pensioners. The paper identifies and discusses both the limits and the potential of extending existing modeling frameworks. We were able to transfer the methodology of microsimulation to the group of retirees, using a microsimulation model based on the German Socio-Economic Panel. Simulations of hypothetical reform scenarios, as well as estimated labor supply elasticities, yield plausible results that are consistent with findings on labor supply responses among the younger working-age population. We plan to advance this model such that labor supply effects of realistic reform scenarios, like the active pension, can be estimated, as well as distributional effects of such reforms. We also plan to study and estimate in further detail the labor supply elasticities of pensioners with the model.

This paper analyses the role of Minimum Income Schemes (MIS) indexation in safeguarding social protection adequacy across the EU-27 during the 2021–2024 inflation surge. Set within the framework of the European Pillar of Social Rights and the EU’s commitment to reducing poverty and social exclusion, the paper addresses a central policy challenge: how social assistance systems can preserve purchasing power and poverty-mitigation capacity during periods of acute macroeconomic stress. As inflation reached multi-decade highs across the Union, ensuring that MIS kept pace with rising living costs became critical for protecting vulnerable households from real income losses and deepening poverty. The analysis is based on the EUROMOD tax-benefit microsimulation model, allowing for harmonised cross-country comparisons and counterfactual assessments of alternative indexation scenarios. It examines both actual policy responses and hypothetical full inflation (HICP) indexation, focusing on changes in benefit adequacy, eligibility thresholds, and overall poverty outcomes between 2019 and 2024. The findings provide empirical evidence relevant to ongoing debates on automatic stabilisers, benefit uprating mechanisms, and the design of resilient social protection systems. Results show that Member States with automatic indexation mechanisms consistently achieved better poverty outcomes than those relying on discretionary adjustments or lacking formal indexation frameworks. However, the presence of indexation alone proved insufficient. In several countries, benefit erosion occurred because indexation mechanisms were poorly calibrated or failed to fully reflect realised inflation. Countries without any indexation framework experienced the most pronounced deterioration in MIS adequacy and poverty outcomes. A key finding is the wide variation in MIS capacity to offset inflation-induced poverty increases, ranging from near-complete mitigation to minimal impact across Member States. This variation reflects not only differences in indexation practices but also fundamental disparities in MIS coverage and generosity. Narrowly targeted schemes inherently limit poverty reduction potential, regardless of how well benefits are indexed. Counterfactual simulations illustrate this heterogeneity: full HICP indexation would have prevented 39% of the poverty increase in Lithuania but 89% in Slovenia, while Spain’s actual policy mix achieved a 190% offset, reducing poverty below pre-inflation levels. Successful countries combined improvements in benefit adequacy with expanded eligibility. Spain exemplifies this balanced approach, with poverty reduction driven equally by enhanced generosity and broader coverage. By contrast, underperforming countries -including Cyprus, Greece, Finland, and the Netherlands- saw higher poverty rates in 2024 than would have occurred under simple inflation indexation. The findings underscore that effective poverty protection during inflationary periods depends on the interaction between indexation mechanisms and overall MIS design. Comprehensive, automatic indexation of both eligibility thresholds and benefit amounts is essential, but it cannot substitute for adequate benefit levels and inclusive coverage. Proactive policy adjustments that go beyond mechanical inflation indexation can deliver superior outcomes, highlighting the need for holistic MIS reform to strengthen social protection resilience.