THE ANALYSIS OF POLISH BENEFITS SYSTEM WITH THE APPLICATION OF MICROSIMULATION MODEL SIMPL (Analizy polskiego systemu podatkowo-zasilkowego z wykorzystaniem modelu mikrosymulacyjnego SIMPL)
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The author provides two examples of applications of SIMPL - the recently developed Polish microsimulation model. The model is first used to highlight very specific features of the Polish benefit system using stylised examples of households types and comparing their financial situation in Poland, Germany, and the UK. He then uses 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 benefit primarily households from the top of the income distribution. Households from the bottom income deciles seem to have benefited little from the recent reform package. The analysis shows that it will be difficult to address the problem of child poverty in Poland without reforming the system of benefits. Given the analysis in the first part of the paper, the author stresses 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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