The Analysis of Polish Benefi ts System with the Application of Microsimulation Model SIMPL
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Deutsches Institut für Wirtschatsforschung, DIW-Berlin
Publication date: 2020-06-05
Problemy Polityki Społecznej 2008;11:87-107
We provide two examples of applications of SIMPL – the recently developed Polish microsimulation model. The model is fi rst used to highlight very specifi c features of the Polish benefi t system using stylised examples of households types and comparing their fi nancial situation in Poland, Germany and the UK. We then use the model to analyse recent reforms of social security contributions and income taxes in Poland. Both the reduction in the SSC rates and an introduction of a child tax credit seem to benefi t primarily households from the top of the income distribution. Households from the bottom income deciles seem to have benefi ted little from the recent reform package. The analysis shows that it will be diffi cult to address the problem of child poverty in Poland without reforming the system of benefi ts. Given the analysis in the fi rst part of the paper, we stress that such reforms require a complex approach and must be conducted extremely carefully to account for their consequences on labour market incentives.
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