Integrating output in Euromod: an assessment of the sensitivity of multi country microsimulation results

EUROMOD is a 15-country tax-benefit microsimulation model based on national household micro-data. It is designed to estimate the revenue and distributional effects of national or EUwide changes in social and fiscal policy. In order to provide European results, and for results at the national level to be comparable, it is necessary to make adjustments to the input microdata and to adopt assumptions about the relative value of incomes across countries. This paper explores the sensitivity of model results to the choice of these adjustments and assumptions. It focuses particularly on the effects of the treatment of survey non-response and income underreporting, and on the choice of exchange rates and equivalence scales.