Technical Support for the Development and Update of EUROMOD: Support to EUROMOD for Luxembourg - Years 2021-2024

The Fiscal Policy Analysis Unit (JRC B.2) of the Directorate Growth and Innovation assesses tax policies and structural reforms to support the action plan for a fair and efficient taxation in the EU. Tax policies of all member states are analysed with respect to efficiency and equity as well as the associated regulatory burdens. The key modelling tool is EUROMOD, the microsimulation model for the European Union, which is being used to address broad thematic issues as well as to support policy recommendations for the fiscal and economic surveillance carried out by the Commission services in the context of the European Semester. EUROMOD allows to study the effects of taxes and social benefits on household incomes and work incentives for the population of each country and for the EU as a whole. EUROMOD is unique in its area as it features a great flexibility in the scope of its simulation and ensures cross-country consistency of the modelling approach and comparability of the results. The model has increasingly been used by the Commission services over the past few years, particularly so in the European Semester context. Additionally, the model represents a valuable research infrastructure for the academic community in the area of fiscal policy analysis, with highly cited research conducted using EUROMOD being published in top journals. The maintenance and development of the EUROMOD microsimulation model, initially based at the University of Essex, is being progressively transferred to the JRC during a transition period of 3 years which started in February 2018. From 2021, the Commission will be responsible for the development and update of the EUROMOD modules relative to all EU countries plus United Kingdom. The resource is updated annually in collaboration with national teams that provide local expertise in their respective tax-benefit systems and, in many cases, the input data for their country. The national teams also make a major contribution to the production of the EUROMOD Country Reports. The aim of the present project EUROMOD Y12 (2021 - 2024) is to update EUROMOD for Luxembourg for 2021-2024 policies and EU-SILC data. The team oversees the models maintenance and development of Luxembourg part.

The summary of Country updating tasks:
1. Input micro-data update
2. Documenting policy rules
3. Implementing policy rules in EUROMOD
4. Documenting and testing the model
5. Key indicators: calculation and validation
6. Additional activities