An Introduction to ESPASIM: A Microsimulation Model to Assess Tax-Benefit Reforms in Spain

ESPASIM is a static micro-simulation model of taxes and benefits for Spain. Taking into consideration the information provided by micro-data from a representative sample of Spanish individuals and households, ESPASIM simulates the effect that different tax-benefit policy scenarios would have on the distribution of this population’s. Given the characteristics, circumstances, income and expenditure of each individual, ESPASIM calculates the tax this person would pay and the benefits that he/she would receive under alternative policy systems. This enables one, for example, to calculate the tax payable, and find out who would benefit or be adversely affected by a specific policy, or the impact of different policy scenarios on inequality and poverty. ESPASIM is a user-friendly program, accessible to anyone familiar with the Spanish tax-benefit system and with basic computer knowledge. This paper is an introduction to how ESPASIM works and what it can and cannot do.