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Documentation IZAΨMOD: The IZA Policy SImulation MODel
by Andreas Peichl, Hilmar Schneider, Sebastian Siegloch
(April 2010)
see also IZAΨMOD for more information

Abstract:
This paper describes IZAΨMOD, the policy microsimulation model of the Institute for the Study of Labor (IZA). The model uses household microdata from the German Socio-Economic Panel Study and firm data from the German linked employer-employee dataset LIAB. IZAΨMOD consists of three components: First, a static module simulates the effects of a tax reform on the budget of the individual households. Secondly, behavioral labor supply responses are estimated. The third component distinguishes our model from most other microsimulation tools. A demand module takes into account possible restrictions of labor demand and identifies the partial equilibrium of the labor market after the supply reactions.
Text: See Discussion Paper No. 4865